Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______.

Commission File Number 000-26108

AMERICAN CANNABIS COMPANY, INC.

(Exact name of registrant as specified in its charter)

Delaware		90-1116625
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

1004 Tejon Street
Colorado Springs, Colorado		80903
(Address of principal executive offices)		(Zip Code)
(303) 974-4770 (Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). ☐

If an emerging growth company, indicate by a check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

On February 11, 2025, 185,800,915 shares of common stock were outstanding.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION

Item 1.	FINANCIAL STATEMENTS:

	CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2024 (UNAUDITED) AND DECEMBER 31, 2023	3

	CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2024, AND 2023 (UNAUDITED).	4

	CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 2024, AND 2023 (UNAUDITED)	5

	CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2024, AND 2023 (UNAUDITED).	6

	NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR JUNE 30, 2024, AND 2023.	7

Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	25

Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	31

Item 4.	CONTROLS AND PROCEDURES	31

PART II. OTHER INFORMATION

Item 1.	LEGAL PROCEEDINGS	33

Item 1A.	RISK FACTORS	33

Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	33

Item 3.	DEFAULTS UPON SENIOR SECURITIES	33

Item 4.	MINE SAFETY DISCLOSURES	33

Item 5.	OTHER INFORMATION	34

Item 6.	EXHIBITS	34

SIGNATURES		35

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AMERICAN CANNABIS COMPANY, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


	June 30, 2024			December 31, 2023
ASSETS
Current Assets
Cash and equivalents	$	2,747		$	21,085
Accounts receivable, Net		136,624			234,330
Inventory		265,773			586,206
Prepaid expenses and other current assets		13,976			58,757
Total Current Assets		419,120			900,378

Property and equipment, net		389,788			410,344

Other Assets
Intangible assets, net amortization		926,778			1,037,889
Right of use assets - operating leases, net		379,562			474,472
Long term deposits		6,000			6,000
Total Other Assets		1,312,340			1,518,361
TOTAL ASSETS	$	2,121,248		$	2,829,083

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	1,180,132		$	1,010,698
Advances from clients		39,046			162,414
Accrued and other current liabilities		558,478			467,495
Stock payable		17,021			17,021
Right of use liabilities, all current		203,292			199,891
Litigation settlement, current		2,500			10,000
Note payables, current		195,937			300,000
Total Current Liabilities		2,196,406			2,167,519

LONG TERM LIABILITIES
LTD note payable		384,524			385,433
Right of use liabilities - LT		176,271			274,581
Total Long Term Liabilities		560,795			660,014
TOTAL LIABILITIES		2,757,201			2,827,533

Shareholders’ Equity
Preferred Stock, $0.01 par value, 5,000,000 shares authorized; 0 shares issued and outstanding at June 30, 2024 and December 31, 2023 , respectively		—			—
Common stock, $0.00001 par value; 500,000,000 shares authorized; 185,800,915 and 171,402,938 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		1,858			1,714
Additional paid-in capital		13,872,036			13,740,961
Accumulated deficit		(14,509,847	)		(13,741,125	)

Total Shareholders’ Equity		(635,953	)		1,550

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		2,121,248			2,829,083

The accompanying notes are an integral part of these unaudited consolidated financial statements

AMERICAN CANNABIS COMPANY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2024			2023			2024			2023

Revenue
Consulting Services	$	21,629		$	307,685		$	29,958		$	468,500
Product & Equipment		86,788			374,209			104,389			737,759
Cannabis Products		323,461			170,835			553,252			358,856
Total Revenues		431,878			852,729			687,599			1,565,115

Cost of Revenues
Cost of Consulting Services		—			58,085			—			103,085
Cost of Products and Equipment		72,130			290,079			89,392			507,646
Cost of Cannabis Products		662,852			138,179			795,616			311,488
Total Cost of Revenues		734,982			486,343			885,008			922,219

Gross Profit		(303,104)			366,386			(197,409	)		642,896

Operating Expenses
General and Administrative		249,309			437,996			481,444			1,081,600
Selling and Marketing		4,334			52,849			6,684			117,384
Stock-Based Compensation expense		—			7,935			—			17,021
Total Operating Expenses		253,643			498,780			488,128			1,216,005

Loss from Operations		(556,747	)		(132,394	)		(685,537	)		(573,109	)

Other Income (Expenses)
Interest Expense		(82,504	)		(32,728	)		(89,982	)		(64,363	)
Gain on fair market value of derivatives		3,080			—			3,080			—
Other Income		(1	)		176,966			3,717			186,316
Total Other Income (Expenses)		(79,425	)		144,238			(83,185	)		121,953

Loss Before Income Taxes		(636,172	)		11,844			(768,722	)		(451,156	)
Provision for income taxes		—

NET (Loss) Income	$	(636,172	)	$	11,844		$	(768,722	)	$	(456,156	)

Net loss per common share – basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.01	)
Weighted average common shares – basic and diluted *		185,800,915			85,727,938			184,300,055			84,795,246

The accompanying notes are an integral part of these unaudited consolidated financial statements.

AMERICAN CANNABIS COMPANY, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023


	Common Stock				Additional Paid-In		Accumulated			Total Stockholders’
	Shares		Amount ($)		Capital ($)		Deficit ($)			Equity/ (Deficit) ($)
Balance December 31, 2022		92,152,938		922		11,949,409		(10,080,709	)		1,869,622

Stock based compensation to employees		—		—		74,342		—			74,342
Net income		—		—		—		(522,175	)		(522,175	)
Balance March 31, 2023		92,152,938		922		12,023,751		(10,543,709	)		1,480,964

Net income		—		—		—		11,844			11,484
Balance June 30, 2023		92,152,938		922		12,023,751		(10,531,865	)		1,492,808


	Common Stock				Additional Paid-In		Accumulated			Total Stockholders’
	Shares		Amount ($)		Capital ($)		Deficit ($)			Equity/ (Deficit) ($)
Balance December 31, 2023		171,402,938		1,714		13,740,961		(13,741,125	)		1,550

Net loss		—		—		—		(132,550	)		(132,550	)
Balance March 31, 2024		171,402,938		1,714		13,740,961		(13,873,675	)		(131,000	)

Stock issued on conversion of debt		14,397,977		144		67,005		—			67,149
Settlement of derivative		—		—		64,070		—			64,070
Net loss		—		—		—		(636,172	)		(636,172	)
Balance June 30, 2024		185,800,915		1,858		13,872,036		(14,509,847	)		(635,953	)

The accompanying notes are an integral part of these unaudited consolidated financial statements

AMERICAN CANNABIS COMPANY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	For the Six Months Ended June 30,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(768,722	)	$	(451,155	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		131,667			121,499
Discount amortization		67,150			—
Gain on change in fair market value of derivative liabilities		(3,080	)		—
Right of use lease asset amortization		94,910			41,072
Changes in operating assets and liabilities:
Accounts receivable		97,706			175,807
Inventory		320,433			(155,318	)
Prepaid expenses and other current assets		44,781			(4,021	)
Accounts payable		169,434			130,165
Advances from clients		(123,368	)		(124,492	)
Accrued and other current liabilities		83,482			223,703
Litigation settlement liability		(7,500	)		(87,500	)
Operating Lease Liability		(94,909	)		(41,072	)
Net Cash Provided by (Used In) Operating Activities	$	19,484		$	(171,362	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		—			(39,101	)
Net Cash Used in Investing Activities	$	—		$	(39,101	)

CASH FLOWS FROM FINANCING ACTIVITIES:
LTD Note Payable		(909	)		185,660
Repayments of notes payable		(36,913	)		—
Net Cash Provided by (Used in) Financing Activities	$	(37,822	)	$	185,660

NET DECREASE IN CASH		(18,338	)		(24,803	)

CASH AT BEGINNING OF PERIOD		21,085			117,547

CASH AT END OF PERIOD	$	2,747		$	92,742

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes	$	—		$	—
Cash paid for interest	$	—		$	—

NONCASH INVESTING AND FINANCING:
Stock issued on conversion of debt	$	67,005		$	—
Settlement of derivative liability	$	64,070		$	—

The accompanying notes are an integral part of these unaudited consolidated financial statements

AMERICAN CANNABIS COMPANY, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023

(UNAUDITED)

Note 1. Principles of Consolidation.

The unaudited condensed consolidated financial statements for the three months ended June 30, 2024, and 2023 include the accounts of American Cannabis Company, Inc. and its wholly owned subsidiary, Hollister & Blacksmith, Inc., doing business as American Cannabis Company, Inc. Intercompany accounts and transactions have been eliminated.

Note 2. Description of Business.

American Cannabis Company, Inc. and its wholly-owned subsidiary Company, Hollister & Blacksmith, Inc., doing business as American Cannabis Consulting (“American Cannabis Consulting”), (collectively “the “Company”), are based in Colorado Springs,, Colorado and operate a fully integrated business model that features end-to-end solutions for businesses operating in the regulated cannabis industry in states and countries where cannabis is regulated and/or has been de-criminalized for medical use and/or legalized for recreational use. We provide advisory and consulting services specific to this industry, design industry-specific products and facilities, and sell both exclusive and non-exclusive customer products commonly used in the industry. In April 2021, we expanded our operations to include a cultivation facility and 3 retail dispensaries in Colorado Springs, Colorado and entered into the growth and sale of medicinal cannabis products.

Note 3. Summary of Significant Accounting Policies

Basis of Accounting

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America, pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include normal recurring adjustments that are necessary for a fair presentation of the results for the periods presented.

Going Concern

Accounting Standards Codification (“ASC”) Topic 205-40, Presentation of Financial Statements - Going Concern (“ASC 205-40”) requires management to assess the Company’s ability to continue as a going concern for one year after the date the financial statements are issued. Under ASC 205-40, management has the responsibility to evaluate whether conditions and/or events raise substantial doubt about our ability to meet future financial obligations as they become due within one year after the date that the financial statements are issued. As required by this standard, management’s evaluation shall initially not take into consideration the potential mitigating effects of management’s plans that have not been fully implemented as of the date the financial statements are issued.

Our assessment included preparing a detailed cash forecast that included all projected cash inflows and outflows. During 2021, we secured additional cash financing through the sales and issuances of our common stock. However, we continue to focus on growing our revenues. Accordingly, operating expenditures may exceed the revenue we expect to receive for the foreseeable future. We also have a history of operating losses, negative operating cash flows, and negative working capital, and we expect these trends to continue into the foreseeable future.

As of the date of this Quarterly Report on Form 10-Q, while we believe we have adequate capital resources to complete our near-term operations, there is no guarantee that such capital resources will be sufficient until such time we reach profitability. We may access capital markets to fund strategic acquisitions or ongoing operations on terms we believe are favorable. The timing and amount of capital that may be raised are dependent on market conditions and the terms and conditions upon which investors would be required to provide such capital. We may utilize debt or sell newly issued equity securities through public or private transactions. There can be no assurance that we will be able to obtain additional funding on satisfactory terms or at all. In addition, no assurance can be given that any such financing, if obtained, will be adequate to meet our capital needs and support our growth. If additional funding cannot be obtained on a timely basis and on satisfactory terms, our operations would be materially negatively impacted; however, we have been successful in accessing capital markets in the past, and we are confident in our ability to access capital markets again if needed.

The Company has an accumulated deficit and recurring losses and expects continuing future losses. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s primary source of operating funds during the six months ended June 30, 2024, and the year ended December 31, 2023, has been funds generated from operations. The Company has experienced net losses from operations since its inception and requires additional financing to fund future operations.

The Company is dependent upon management’s ability to develop profitable operations and obtain additional funding sources. There can be no assurance that the Company’s financing efforts will result in profitable operations or enhance liquidity. The accompanying statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

The accompanying consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

Use of Estimates in Financial Reporting

The preparation of unaudited consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amount of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the condensed consolidated financial statements during the periods presented. Actual results could differ from these estimates. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period in which they are deemed to be necessary. Significant estimates made in the accompanying consolidated financial statements include but are not limited to following those related to revenue recognition, allowance for doubtful accounts and unbilled services, lives and recoverability of equipment and other long-lived assets, the allocation of the asset purchase price, contingencies, and litigation. The Company is subject to uncertainties, such as the impact of future events, economic, environmental, and political factors, and changes in the business climate; therefore, actual results may differ from those estimates. When no estimate in a given range is deemed to be better than any other when estimating contingent liabilities, the low end of the range is accrued. Accordingly, the accounting estimates used in the preparation of the Company’s consolidated financial statements will change as new events occur, as more experience is acquired, as additional information is obtained, and as the Company’s operating environment changes. Changes in estimates are made when circumstances warrant. Such changes and refinements in estimation methodologies are reflected in reported results of operations; if material, the effects of changes in estimates are disclosed in the notes to the consolidated financial statements.

Unaudited Interim Financial Statements

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for (a) the financial position, (b) the result of operations, and (c) cash flows have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents are held in operating accounts at a major financial institution. Cash balances may exceed federally insured limits. Management believes the financial risk associated with these balances is minimal and has not experienced any losses to date.

Accounts Receivable

Accounts receivable are recorded at the net value of face amount less an allowance for doubtful accounts. The Company evaluates its accounts receivable periodically based on specific identification of any accounts receivable for which the Company deems the net realizable value to be less than the gross amount of accounts receivable recorded; in these cases, an allowance for doubtful accounts is established for those balances. In determining its need for an allowance for doubtful accounts, the Company considers historical experience, analysis of past due amounts, client creditworthiness, and any other relevant available information. However, the Company’s actual experience may vary from its estimates. If the financial condition of its clients were to deteriorate, resulting in their inability or unwillingness to pay the Company’s fees, it may need to record additional allowances or write-offs in future periods. This risk is mitigated to the extent that the Company receives retainers from its clients prior to performing significant services.

The allowance for doubtful accounts, if any, is recorded as a reduction in revenue to the extent the provision relates to fee adjustments and other discretionary pricing adjustments. To the extent the provision relates to a client’s inability to make required payments on accounts receivables, the provision is recorded in operating expenses. As of June 30, 2024, and December 31, 2023, the Company’s allowance for doubtful accounts was $4,071 and $4,071 respectively. The Company did not record a bad debt expense in either of the six months ended June 30, 2024, and 2023.

Deposits

Deposits are comprised of advance payments made to third parties for rent, utilities, and inventory for which the Company has not yet taken title. When the Company takes title to inventory for which deposits are made, the related amount is classified as inventory and then recognized as a cost of revenues upon sale.

Inventory

Inventory is comprised of products and equipment owned by the Company to be sold to end customers. The Company’s inventory as it relates to its soil products and equipment is valued at cost using the first-in, first-out, and specific identification methods, unless and until the market value for the inventory is lower than cost, in which case an allowance is established to reduce the valuation to net realizable value. As of June 30, 2024, and December 31, 2023, market values of all the Company’s inventory were greater than cost, and accordingly, no such valuation allowance was recognized.

Inventory also consists of pre-harvested cannabis plants and related end products. Inventory is valued at the lower of cost or net realizable value. Costs of inventory purchased from third-party vendors for retail sales at dispensaries are determined using the first in, first out method. Costs are capitalized to cultivated inventory until substantially ready for sale. Costs include direct and indirect labor, consumables, materials, packaging supplies, utilities, facilities costs, quality and testing costs, production-related depreciation, and other overhead costs. The Company periodically reviews physical inventory for excess, obsolete, and potentially impaired items. The reserve estimate for excess and obsolete inventory is based on expected future use and on an assessment of market conditions. At June 30, 2024, the Company’s management determined that a reserve for excess and obsolete inventory was necessary and recorded in cost of sales in the amount of $482,674.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets are primarily comprised of advance payments made to third parties for independent contractors’ services or other general expenses. Prepaid services and general expenses are amortized over the applicable periods, which approximate the life of the contract or service period.

Significant Clients and Customers

Three customers accounted for 43.4% of the Company’s total revenues during the six months ended June 30, 2024.

Three customers accounted for 42.5% of the Company’s total revenues during the six months ended June 30, 2023.

Property and Equipment, net

Property and Equipment are stated at net book value, cost less depreciation. Maintenance and repairs are expensed as incurred. Depreciation of owned equipment is provided using the straight-line method over the estimated useful lives of the assets, ranging from two to seven years. Costs associated with in-progress construction are capitalized as incurred, and depreciation is consummated once the underlying asset is placed into service. Property and equipment are reviewed for impairment as discussed below under “Accounting for the Impairment of Long-Lived Assets.” The Company did not capitalize any interest as of June 30, 2024, and December 31, 2023.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of assets acquired and liabilities assumed. The Company accounts for goodwill under ASC Topic 350, Intangibles-Goodwill and Other. The Company tests goodwill for impairment annually or more frequently whenever events or circumstances indicate impairment may exist. Goodwill is stated at cost less accumulated impairment losses. The Company completes its goodwill impairment test annually in the fourth quarter. On December 31, 2023, the Company evaluated the goodwill related to the acquisition of the Naturaleaf entity acquired in 2021 and determined that a full impairment of goodwill was necessary.

The Company does not have any other indefinite-lived intangible assets.

Intangible Assets, net

Definite life intangible assets at March 31, 2024, include licenses and brand names recognized as part of the Naturaleaf Acquisition. Intangible assets are recorded at cost. Licenses and brand names represent the estimated fair value of these items at the date of acquisition, April 30, 2021. Intangible assets are amortized on a straight-line basis over their estimated useful life. Licenses are assigned a life of 15 years, and tradenames are assigned a life of 5 years. During the six months ended June 30, 2024, and 2023, the Company recognized amortization expenses of $92,267 and $112,449, respectively.

Accounting for the Impairment of Long-Lived Assets

The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Upon such an occurrence, the recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to forecasted undiscounted net cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. For long-lived assets held for sale, assets are written down to fair value, less cost to sell. Fair value is determined based on discounted cash flows, appraised values, or management’s estimates, depending upon the nature of the assets. The Company had not recorded any impairment charges related to long-lived assets as of June 30, 2024.

Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities.

Our financial instruments include cash, deposits, accounts receivable, accounts payable, advances from clients, accrued expenses, and other current liabilities. Due to their short maturities, their carrying values approximate their fair value.

Revenue Recognition

We have adopted the following accounting principles related to revenue recognition: (a) FASB ASU 2016-12 “Revenue from Contracts with Customers (Topic 606). Due to the nature of our contracts with customers, adopting the new accounting principles did not have a significant impact on our prior period results of operations, cash flows, or financial position.

Our service and product revenues arise from contracts with customers. Service revenue includes consulting revenue. Product revenue includes (a) product sales, (b) equipment sales, and, (c) Cannabis sales. The majority of our revenue is derived from distinct performance obligations, such as time spent delivering a service or the delivery of a specific product.

We may also enter into contracts with customers that identify a single or few distinct performance obligations, but that also have non-distinct, underlying performance obligations. These contracts are typically fulfilled within one to six months. Only an insignificant portion of our revenue would be assessed for allocation between distinct (contractual) performance obligations and non-distinct deliverables between reporting periods, and accordingly, we do not record a contract asset for completed, non-distinct performance obligations prior to invoicing the customer.

We recognize revenue in accordance with ASC 606 using the following 5 steps to identify revenues:

(1)

Identify the contract with the Customer. Our customary practice is to obtain written evidence, typically in the form of a contract or purchase order.

(2)

Identify the performance obligations in the contract. We have rights to payment when services are completed in accordance with the underlying contract, or for the sale of goods when custody is transferred to our customers either upon delivery to our customers’ locations, with no right of return or further obligations.

(3)

Determination of the transaction price. Prices are typically fixed, and no price protections or variables are offered.

(4)

Allocation of the transaction price to the performance obligations in the contract. Transaction prices are typically allocated to the performance obligations outlined in the contract.

(5)

Recognize Revenue when (or as) the entity satisfies a performance obligation. We typically require a retainer for all or a portion of the goods or services to be delivered. We recognize revenue as the performance obligations detailed in the contract are met.

Advances from Client deposits are contract liabilities with customers that represent our obligation to either transfer goods or services in the future or refund the amount received. Where possible, we obtain retainers to lessen our risk of non-payment by our customers. Advances from Client deposits are recognized as revenue as we meet specified performance obligations as detailed in the contract.

Product and Equipment Sales

Revenue from product and equipment sales, including delivery fees, is recognized when an order has been obtained from the customer, the price is fixed and determinable when the order is placed, the product is delivered, the title has been transferred, and collectability is reasonably assured. Generally, our suppliers drop-ship orders to our clients with destination terms. The Company realizes revenue upon delivery to the customer. Given the facts that (1) our customers exercise discretion in determining the timing of when they place their product order, and (2) the price negotiated in our product sales contracts is fixed and determinable at the time the customer places the order, we are not of the opinion that our product sales indicate or involve any significant financing that would materially change the amount of revenue recognized under the contract, or would otherwise contain a significant financing component for us or the customer under FASB ASC Topic 606. During the six months ended June 30, 2024, and 2023, sales returns were $0.

Consulting Services

We also generate revenues from professional services consulting agreements. These arrangements are generally entered: (1) on an hourly basis for a fixed fee or (2) on a contingent fee basis. Generally, we require a complete or partial prepayment or retainer prior to performing services. We utilize and rely upon the proportional performance method for hourly-based fixed-fee service contracts, which recognize revenue as services are completed. Under this method, in order to determine the amount of revenue to be recognized, we calculate the amount of completed work in comparison to the total services to be provided under the arrangement or deliverable. We segregate upon entry into a contract any advances or retainers received from clients for fixed fee hourly services into a separate “Advances from Clients account and only recognize revenues as we incur and charge billable hours, and then deposit the funds earned into our operating account. Because our hourly fees for services are fixed and determinable and are only earned and recognized as revenue upon actual performance, we are of the opinion that such arrangements are not an indicator of a vendor or customer-based significant financing that would materially change the amount of revenue we recognize under the contract or would otherwise contain a significant financing component under FASB ASC Topic 606.

Occasionally, our fixed-fee hourly engagements are recognized under the completed performance method. Some fixed fee arrangements are for the completion of a final deliverable or act which is significant to the arrangement. These engagements do not generally exceed a one-year term. If the performance is for a final deliverable or act, we recognize revenue under the completed performance method, in which revenue is recognized once the final act or deliverable is performed or delivered for a fixed fee. Revenue recognition is affected by a number of factors that change the estimated amount of work required to complete the deliverable, such as changes in scope, timing, awaiting notification of license award from the local government, and the level of client involvement. Losses, if any, on fixed-fee engagements are recognized in the period in which the loss first becomes probable and reasonably estimable. FASB ASC Topic 606 provides a practical expedient to disregard the effects of a financing component if the period between payment and performance is one year or less. As our fixed fee hourly engagements do not exceed one year, no significant customer-based financing is implicated under FASB ASC Topic 606. During the six months ended June 30, 2024, and 2023, we incurred no losses from fixed fee engagements that terminated prior to completion. We believe that if an engagement terminates prior to completion, we can recover the costs incurred related to the services provided.

We primarily enter into arrangements for which fixed and determinable revenues are contingent and agreed upon, achieving a pre-determined deliverable or future outcome. Any contingent revenue for these arrangements is not recognized until the contingency is resolved and collectability is reasonably assured.

Our arrangements with clients may include terms to deliver multiple services or deliverables. These contracts specifically identify the services to be provided with the corresponding deliverable. The value for each deliverable is determined based on the prices charged when each element is sold separately or by other vendor-specific objective evidence (“VSOE”) or estimates of stand-alone selling prices. Revenues are recognized in accordance with our accounting policies for the elements as described above (see Product Sales). The elements qualify for separation when the deliverables have value on a stand-alone basis, and the value of the separate elements can be established by VSOE or an estimated selling price.

While assigning values and identifying separate elements requires judgment, selling prices of the separate elements are generally readily identifiable as fixed and determinable as we also sell those elements individually outside of a multiple services engagement. Contracts with multiple elements typically incorporate a fixed-fee or hourly pricing structure. Arrangements are typically terminable by either party upon sufficient notice or do not include provisions for refunds relating to services provided.

Reimbursable expenses, including those relating to travel, other out-of-pocket expenses, and any third-party costs, are included as a component of revenues. Typically, an equivalent amount of reimbursable expenses is included in total direct client service costs. Reimbursable expenses related to time and materials and fixed-fee engagements are recognized as revenue in the period in which the expense is incurred, and collectability is reasonably assured. Taxes collected from customers and remitted to governmental authorities are recognized as liabilities and paid to the appropriate government entities.

Cannabis Sales

Revenues consist of the retail sale of cannabis and related products. Revenue is recognized at the point of sale for retail customers. Payment is typically due upon transferring the goods to the customer or within a specified time period permitted under the Company’s credit policy. Sales discounts were not material during the six months ended June 30, 2024.

Loyalty Reward Program

The Company offers a loyalty reward program to its dispensary customers that provides a discount on purchases based on the total amount at the time of purchase. Management has determined that there is no separate performance obligation to the reward program, i.e., the accumulation and redemption of points, and as such, the Company recognizes the revenue at the time of purchase.

Costs of Revenues

The Company’s policy is to recognize costs of revenue in the same manner as revenue recognition. Cost of revenue includes the costs directly attributable to revenue recognition and includes compensation and fees for services, travel and other expenses for services, and costs of products and equipment. Selling, general, and administrative expenses are charged to expenses as incurred.

Advertising and Promotion Costs

Advertising and Promotion costs are included as a component of selling and marketing expenses and are expensed as incurred. During the six months ended June 30, 2024, and 2023, these expenses were $8,579 and $117,384, respectively.

Shipping and Handling Costs

For product and equipment sales, shipping and handling costs are included as a component of the cost of revenues.

Stock-Based Compensation

Restricted shares are awarded to employees and entitle the grantee to receive shares of common stock at the end of the established vesting period. The fair value of the grant is based on the stock price on the date of the grant. We recognize related compensation costs on a straight-line basis over the requisite vesting period of the award, which to date has been one year from the grant date. During the six months ended June 30, 2024, and 2023, stock-based compensation expenses for restricted shares for Company employees were $0 and $17,021, respectively.

Research and Development

As a component of our equipment and supplies offerings, from time to time, we design and develop our own proprietary products to meet demand in markets where current offerings are insufficient. These products include but are not limited to The Satchel™, Cultivation Cube™, So-Hum Living Soils™, and HDCS™. Costs associated with the development of new products are expensed as incurred as research and development operating expenses. During the six months ended June 30, 2024, and 2023, our research and development costs were de minimis.

Income Taxes

The Company’s corporate status changed from an S Corporation, which it had been since its inception, to a C Corporation during the year ended December 31, 2014. As provided in Section 1361 of the Internal Revenue Code, for income tax purposes, S Corporations are not subject to corporate income taxes. Instead, the owners are taxed on their proportionate share of the S Corporation’s taxable income. We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns in accordance with applicable accounting guidance for accounting for income taxes, using currently enacted tax rates in effect for the year in which the differences are expected to reverse. We record a valuation allowance when necessary to reduce deferred tax assets to the amount expected to be realized. For the year ended December 31, 2022, due to cumulative losses, since our corporate status changed, we recorded a valuation allowance against our deferred tax asset that reduced our income tax benefit for the period to zero. As of June 30, 2024, and December 31, 2023, we had no liabilities related to federal or state income taxes, and the carrying value of our deferred tax asset was zero.

Due to its cannabis operations, the Company is subject to the limitations of Internal Revenue Code (“IRC”) Section 280E, under which the Company is only allowed to deduct expenses directly related to product sales. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E.

Net Loss Per Common Share

The Company reports net loss per common share in accordance with FASB ASC 260, “Earnings per Share.” This statement requires a dual presentation of basic and diluted earnings with a reconciliation of the numerator and denominator of the earnings per share computations. Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period and excludes the effects of any potentially dilutive securities. Diluted earnings per share are equal to basic earnings per share because there are no potential dilatable instruments that would have an anti-dilutive effect on earnings. Diluted net loss per share gives effect to any dilutive potential common stock outstanding during the period. The computation does not assume conversion, exercise, or contingent exercise of securities since that would have an anti-dilutive effect on earnings.

Related Party Transactions

The Company follows FASB ASC subtopic 850-10, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

Pursuant to ASC 850-10-20, related parties include: a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and profit sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

Impact of COVID-19 Pandemic

On March 11, 2020, the World Health Organization declared the current coronavirus (“COVID-19”) outbreak to be a global pandemic. In response to this declaration and the rapid spread of COVID-19 within the United States, federal, state, and local governments throughout the country have imposed varying degrees of restrictions on social and commercial activity to promote social distancing in an effort to slow the spread of the illness. These measures had a significant adverse impact on many sectors of the economy, including retail commerce.

In response to state and local measures and for the protection of both employees, the Company made required changes to operations, which did not have a material impact on operations or the Company’s financial condition.

While the state and local governments have eased restrictions on restrictions and activities, it is possible that a resurgence in COVID-19 cases could prompt a return to or new tighter restrictions to be instituted in the future. The Company is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of the date of issuance of these unaudited condensed consolidated financial statements.

Recent Accounting Pronouncements

The Company does not believe that any recently issued effective pronouncements, or pronouncements issued but not yet effective if adopted, would have a material effect on the accompanying unaudited condensed consolidated financial statements.

Note 4. Naturaleaf Asset Acquisition

On April 30, 2021, the Company closed its acquisition of the assets of Medihemp, LLC (“Medihemp”), and its wholly-owned subsidiary SLAM Enterprises, LLC (“SLAM”), and Medical Cannabis Caregivers, Inc. (“Medical Cannabis”), each an entity organized and operating under the laws of the State of Colorado, and all doing business as “Naturaleaf” operating in the medicinal cannabis industry in Colorado.

Medihemp and SLAM, respectively, own fixed assets and operate two retail Medical Marijuana Centers located in Colorado Springs, Colorado. Medical Cannabis owns fixed assets and operates a retail Medical Marijuana Center located in Colorado Springs, Colorado. Medical Cannabis also owns and operates a Medical Marijuana Optional Premises Cultivation license and a Medical Marijuana-Infused Product Manufacturer license.

Naturaleaf agreed to sell or assign to the Company, and the Company purchased and was the assignee of the following assets:

Three Medical Marijuana (MMC) Store Licenses;

One Marijuana Infused Product Licenses (MIPS); and,

One Option Premises Cultivation License (OPC); and,

Related real property assets, goodwill, and related business assets.

As a result, the Company has expanded its business model to include the cultivation and retail sale of cannabis in the medicinal cannabis industry.

The aggregate consideration paid for the Assets was $2,912,000, which consisted of (i) a cash payment of $1,100,000, (ii) the issuance of a promissory note to the owner of Naturaleaf in the principal amount of $1,100,000 (the “Seller Note”), and (iii) the issuance of 3,000,000 shares of the Company’s restricted common stock valued at $0.23 per share or $690,000, and (iv) the assumption of $22,000 in current payables.

On April 29, 2022, the Company and the previous owners of Naturaleaf agreed to an amendment of the note. The Company paid $550,000 of the principal, combined with accrued interest of $110,000, in exchange for a new note with a principal balance of $550,000, interest per annum of 12%, and a maturity date of April 29, 2023.

On April 29, 2022, the Company and Naturaleaf amended the promissory note to restructure the payment schedule (“First Amendment”). The parties agreed that in consideration of the Company’s payment of $550,000 and outstanding interest of $110,000, a new promissory note with a maturity date of April 29, 2023, in the principal amount of $550,000 and 12% interest accruing annually, would resolve all Company payments of the purchase price. The parties entered into the First Amendment, and the Company paid the consideration of $550,000 in principal and $110,000 in interest.

On June 8, 2023, the Company and Naturaleaf amended the promissory note (“Second Amendment”) to restructure the remaining payments due to be made by the Company under the amended Note, totaling principal and interest of $651,162.50 (“Second Amendment”). Pursuant to the Second Amendment, the Company agreed to pay $150,000 by June 30, 2023; $100,000 by July 31, 2023; and the balance by May 1, 2024. The Company made both 2023 payments and granted Naturaleaf a first-priority lien and security interest on the assets of the Registrant, securing the payment and performance of the payment schedule. The balance due has yet to be paid and is in default. The Company and Naturaleaf are currently in good faith negotiations to resolve the outstanding balance due.

On May 31, 2023, the Company sold Colorado State License No. 402-01065 (Medical Marijuana Store) and City of Colorado Springs License No. 0850714L in exchange for $100,000. As of May 31, 2023, the Company discontinued its associated operations at Palmer Park Boulevard, Ste. A, Colorado Springs, CO, and as of June 30, 2023, its lease obligation terminated without penalty, interest, or other liquidated damages.

Note 5. Accounts Receivable and Advance from Clients


	June 30, 2024			December 31, 2023
Accounts Receivable – Trade	$	140,695		$	238,401
Less: Allowance for Doubtful Accounts		(4,071	)		(4,071	)
Accounts Receivable, net	$	136,624		$	234,330

The Company had bad debt expenses during the six months ended June 30, 2024, and 2023 of $0 and $12,000, respectively.

Our Advances from Clients had the following activity:

Schedule of advances from clients
	June 30, 2024			December 31, 2023
Beginning Balance	$	162,414		$	280,705
Additional deposits received		—			659,790
Less: Deposits recognized as revenue		(123,368	)		(778,801	)
Ending Balance	$	39,046		$	162,414

Note 6. Inventory

Inventory consisted of the following:

Schedule of inventory
	June 30, 2024		December 31, 2023
Raw Materials - Soil	$	—	$	75,300
Work In Process - Cultivation		225,057		444,532
Finished Goods - Soil		—		—
Finished Goods - Cannabis Retail		40,716		66,374
Total Inventory	$	265,773	$	586,206

Note 7. Property and Equipment, net

Property and equipment, net, was comprised of the following:


	June 30, 2024			December 31, 2023
Office equipment	$	54,406		$	47,380
Software		13,204			13,204
Furniture and Fixtures		2,328			2,328
Machinery and Equipment		517,510			517,510
Property and equipment, gross	$	587,448		$	580,422
Less: Accumulated Depreciation		(197,660	)		(170,099	)
Property and equipment, net	$	389,788		$	410,344

Note 8. Intangibles Assets, Net

A significant amount of the Company’s current identified intangible assets were assumed upon consummation of the Naturaleaf acquisition on April 30, 2021. The Company has incurred capitalizable costs in connection with patent applications that it started work on. Identified intangible assets consisted of the following at the dates indicated below:

Schedule of identified intangible asset
	June 30, 2024
	Gross carrying amount		Accumulated amortization			Carrying value		Estimated useful life
Licenses	$	800,000	$	(214,552	)	$	585,448		15 years
Brand	$	660,000	$	(318,669	)	$	341,331		5 years
Patent Applications	$	—		—		$	—		—
Total intangible assets, net	$	1,460,000	$	(533,221	)	$	926,778


	December 31, 2023
	Gross carrying amount		Accumulated amortization			Carrying value		Estimated useful life
Licenses	$	800,000	$	(187,866	)	$	612,114		15 years
Brand	$	660,000	$	(252,699	)	$	407,311		5 years
Patent Applications	$	18,464		—		$	18,464		—
Total intangible assets, net	$	1,478,464	$	(440,555	)	$	1,037,909

The weighted-average amortization period for intangible assets we acquired during the year ended December 31, 2023 was approximately 11.47 years. There were no intangible assets acquired during the six months ended June 30, 2024, or 2023.

Amortization expense for intangible assets was $92,666 and $121,449 for the six months ended June 30, 2024 and 2023, respectively. The total estimated amortization expense for our intangible assets for the years 2023 through 2027 is as follows:


Year Ended December 31,
2024	$	186,000
2025	$	186,000
2026	$	145,997
2027	$	54,000
Total	$	571,997

Note 9. Accrued and Other Current Liabilities

Accrued and other current liabilities consisted of the following:


	June 30, 2024		December 31, 2023
Accrued Interest	$	150,172	$	135,213
Accrued Payroll		21,172		11,711
Sales Tax Payable		21,528		8,319
Other Accrued Expenses & Payables		356,606		312,252
Accrued and other current liabilities	$	558,478	$	467,495

Note 10. Stock Payable

The following summarizes the changes in common stock payable:

Schedule of stock payable
	Amount
December 31, 2023	$	17,021
Additional Expenses Incurred		—
Payments Upon Issuance of Shares		—
June 30, 2024	$	17,021

Note 11. Operating Lease Right-of-Use Asset/Operating Lease Liability

Our headquarters are located at 1004 Tejon Street, Colorado Springs, CO.

The Company leases property under various operating leases. Property leases include office, retail and cultivation space with fixed rent payments and lease terms ranging from one to two years. The Company is obligated to pay the lessor for maintenance, real estate taxes, insurance, and other operating expenses on certain property leases. These expenses are variable and are not included in the measurement of the lease asset or lease liability. These expenses are recognized as variable rent expenses when incurred.

The Company’s lease portfolio consists of the following.

●

1004 S. Tejon Street, Colorado Springs, CO 80903; The Company assumed a lease originally entered into on February 12, 2016, which was the subject of a extension agreement dated April 5, 2022. The term of the lease was extended from May 1, 2022 until April 30, 2027. The Company’s monthly rental payments from January 1, 2022 to May 1, 2022 was $3,700. From May 1, 2022 through the year ended December 31, 2022, monthly rent was $3,875. Remaining rental payments due for the extended period are: May 1, 2022 to April 30, 2023 $3,875 May 1, 2023 to April 30, 2024 $4,050 May 1, 2024 to April 30, 2025 $4,225 May 1, 2025 to April 30, 2026 $4,400 May 1, 2026 to April 30, 2027 $4,575

●

2727 Palmer Park Blvd. Suite A, Colorado Springs, CO 80909. As of May 31, 2023, the Company discontinued its associated operations at Palmer Park Boulevard, Ste. A, Colorado Springs, CO, and at year-end, its lease obligation terminated without the Company incurring penalties, interest or liquidated damages.

●

5870 Lehman Drive Suite 200, Colorado Springs, CO 80918 The Company and landlord previously entered into a lease in 2017 which expired December 31, 2022. At December 31, 2022, the Company’s monthly rent was $2,732. On April 26, 2022, the Company and landlord entered into an extension agreement which extended the tenancy from January 1, 2023 through January 1, 2027. Rental payments due for the extended period are: January 1, 2023 $2,898 January 1, 2024 $2,985 January 1, 2025 $3,075 January 1, 2026 $3,167 January 1, 2027 $3,262

●

2611 Durango Drive, CO Springs, CO. The Company and landlord entered into a lease on March 10, 2021, which terminated on May 31, 2022. On June 23, 2021, the Company and landlord entered into an extension of the lease for a term of thirty-six months, beginning June 1, 2022 and terminating June 1, 2024. At December 31, 2022, monthly rent was $11,000. Rental payments due for the extended period are: June 1, 2022 to June 1, 2023 $11,000 June 1, 2023 to June 1, 2024 $11,880 June 1, 2025 to June 1, 2025 $12,830

On May 1, 2020, as part of the Naturaleaf Acquisition, the Company entered into leases for grow facilities and dispensaries. These leases were determined to be operating leases under ASC 842, and such leases were capitalized. It was determined that the Tejon lease, due to its short-term nature, met the criteria of ASC 842-20-25-2, and as such, it was not necessary to capitalize the lease; rent would be recognized on a straight-line basis.

The Company records the lease asset and lease liability at the present value of lease payments over the lease term. The leases typically do not provide an implicit rate; therefore, the Company uses its estimated incremental borrowing rate at the time of lease commencement to discount the present value of lease payments. The Company’s discount rate for operating leases at June 30, 2024 was 12.5%. Leases often include rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate. Lease expense is recognized on a straight-line basis over the lease term to the extent that collection is considered probable. As a result, the Company has been recognizing rents as they become payable.

As of June 30, 2024, the aggregate remaining annual lease payments of operating lease liabilities are as follows:


	Operating Leases
2023		428,229
Total		428,229
Less: amount representing interest		—
Present value of future minimum lease payments		428,229
Less: current obligations under leases		208,464
Long-term lease obligations	$	(219,765	)

Note 12. Loans Payable

Amendment to Naturaleaf Seller Note

On April 29, 2022, the Company and Medihemp, LLC, and its wholly owned subsidiary, SLAM Enterprises, LLC, and Medical Cannabis Caregivers, Inc., all collectively doing business as “Naturaleaf,” (hereafter, “Naturaleaf”) entered into an amendment to the previously disclosed material definitive agreement dated March 11, 2021.

On November 4, 2024, the Company entered into a material definitive agreement with KTEC, LLC, a Delaware limited liability company formerly known as TEC, LLC (“KTEC”), for the sale of 302,900,458 shares of common stock in exchange for $310,000. The agreement requires the Company to allocate at least $135,000 of the proceeds toward outstanding obligations owed to Medihemp, LLC, SLAM Enterprises, LLC, and Medical Cannabis Caregivers, Inc., arising from the Company’s 2021 asset acquisition and subsequent amendments to those agreements in 2022 and 2023. The closing of the transaction is contingent upon the Company filing its delinquent Form 10-Qs for the quarters ended June 30, 2024, and September 30, 2024, as well as its Form 10-K for the year ending December 31, 2024.

As part of the transaction, the Company agreed to assign to Ellis Smith, a director of the Company, and Hollister & Blacksmith, Inc., a Colorado corporation, pending regulatory approval by the Colorado MED, all liabilities and licenses associated with the Naturaleaf transaction, including Medical Marijuana Center Licenses, a Medical Marijuana-Infused Product Manufacturer License, and a Medical Marijuana Optional Premises Cultivation License. Smith and Hollister & Blacksmith agreed to assume, jointly and severally, all related liabilities and indemnify the Company against any claims, debts, or obligations, known or unknown, arising from the Naturaleaf transaction.

Additionally, Ellis Smith released the Company from obligations under two promissory notes issued to him on November 22, 2022, and February 14, 2023, including all principal, accrued interest, and penalties. Smith also guaranteed the resolution of all assigned liabilities and provided indemnification for the Company.

The divestment of licenses and associated liabilities represents a significant step in restructuring the Company’s obligations. For further details concerning the KTEC transaction, see “Commitments and Contingencies” and “Subsequent Events.”

Note 13. Notes Payable.

During the year ended December 31, 2023, the Company entered into a convertible note with 1800 Diagonal Lending, in the amount of $45,937, with an interest rate 12%. This note included an original issue discount of $2,187. This note had a 6 months maturity date and is convertible at 61% of the lowest trading price of the Company’s stock price for a thirty day period. The embedded conversion option of the convertible note contains conversion features that qualify for embedded derivative classification as a result of variable conversion price features, which is not a fixed discount rate. During the six months ended June 30, 2023, the lender opted to convert all of the principal and interest into an aggregate of 12,380,852 shares of the Company’s common stock. Interest expense for the six months ended June 30, 2024, was $2,756. There were no derivative liabilities until 180 day after the funding of the note. The remaining principal balance at June 30, 2024, and December 31, 2023, was $0 and $45,937, respectively.

During the year ended December 31, 2023, the Company entered into a promissory note with 1800 Diagonal Lending, in the amount of $49,438, with an interest rate 12%. This note included an original issue discount of $5,688. This note has a maturity date of March 30, 2024, with nine monthly installment payments of $6,152 for a total payback to the lender of $55,370. The note contained conversion rights in the case of default which allowed for converting the outstanding balance at default into shares of the Company’s common stock at 75% of the lowest trading price of the Company’s stock price for a thirty day period. The Company made a total of 6 payments on the loan totaling $36,913. The embedded conversion option of the convertible note contains conversion features that qualify for embedded derivative classification as a result of variable conversion price features, which is not a fixed discount rate. During the six months ended June 30, 2024, the Company defaulted on its payment obligations and the lender opted to exercise its conversion option upon default, and converted the outstanding principal and interest of $18,457 into a total of 2,017,125 shares of the Company’s common stock. Interest expense for the six months ended June 30, 2024, was $5,932. There were no derivative liabilities until 180 day after the funding of the note. The remaining principal balance at June 30, 2024, and December 31, 2023, was $0 and $30,761, respectively.

Note 14. Related Party Transactions

On February 14, 2023, the Company issued a second promissory note in exchange for $100,000 to its CEO and CFO Ellis Smith. The note is not convertible and matures on August 14, 2023. The note carries 15% interest per annum. These notes are subject to cancelation upon closing of the KTEC transaction, see “Loans Payable” and “Subsequent Events.”

Note 15. Stock-Based Compensation

Restricted Shares Compensation

From time to time, the Company grants certain employees restricted shares of its common stock to provide further compensation in lieu of wages and to align the employee’s interests with the interests of its stockholders. Because vesting is based on continued employment, these equity-based incentives are also intended to attract, retain and motivate personnel upon whose judgment, initiative, and effort the Company’s success is largely dependent.

Note 16. Shareholders’ Equity

Preferred Stock

American Cannabis Company, Inc. is authorized to issue 5,000,000 shares of preferred stock at $0.01 par value. No shares of preferred stock were issued and outstanding at June 30, 2024, and December 31, 2023, respectively.

Common Stock

On March 6, 2024, the Company issued 2,017,125 shares of common stock in conversion of a note.

On January 17, 2024, the Company issued 4,319,628 shares of common stock in conversion of a note.

On January 11, 2024, the Company issued 5,000,000 shares of common stock in conversion of a note.

On January 8, 2024, the Company issued 3,061,224 shares of common stock in conversion of a note.

On August 30, 2023, the Company issued 1 million restricted shares to a service provider to settle an outstanding amount due under contract.

On August 29, 2023, the Company issued 25 million shares of restricted common stock to consultants under contract.

On August 24, 2023, the Company issued 41,000,000 shares of registered common stock to consultants under contract.

On August 24, 2023, the Company issued a total of 12,250,000 shares of restricted common stock to directors and officers under contract.

On January 11, 2023, the Company issued a total of 2,175,000 shares of restricted common stock to directors and officers under contract during 2022.

The fair value of common stock issued is determined based on the closing price of the Company’s common stock on the date granted.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the reporting period. Diluted net loss per share is computed similarly to basic loss per share, except that it includes the potential dilution that could occur if dilutive securities are exercised.

Outstanding stock options and common stock warrants are considered anti-dilutive because we are in a net loss position. Accordingly, the number of weighted average shares outstanding for basic and fully diluted net loss per share are the same. At June 30, 2024, the Company did not have any warrants or options issued and outstanding.

Note 17. Commitments and Contingencies

On June 8, 2025, the Company and Naturaleaf entered into a Second Amendment to the promissory note initially issued in connection with the Company’s acquisition of Naturaleaf (See Note 12). This amendment aimed to restructure the remaining payments due under the original agreement. The total principal and interest due under this amended Note amounted to $651,162.50.

As per the terms of the Second Amendment, the Company was obligated to make the following payments:

• $150,000 by June 30, 2023

• $100,000 by July 31, 2023

The Company successfully made both the 2023 payments. Additionally, to secure the payment schedule and performance, the Company granted Naturaleaf a lien and security interest on the Registrant’s assets.

However, the Company failed to make the final payment due by May 1, 2024, resulting in a default situation. On November 4, 2024, the Company entered into a material definitive agreement with KTEC, LLC, a Delaware limited liability company formerly known as TEC, LLC (“KTEC”), for the sale of 302,900,458 shares of common stock in exchange for $310,000. The agreement requires the Company to allocate at least $135,000 of the proceeds toward outstanding obligations owed to Medihemp, LLC, SLAM Enterprises, LLC, and Medical Cannabis Caregivers, Inc., arising from the Company’s 2021 asset acquisition and subsequent amendments to those agreements in 2022 and 2023. The closing of the transaction is contingent upon the Company filing its delinquent Form 10-Qs for the quarters ended June 30, 2024, and September 30, 2024, filing for 15c2-11 with FINRA, as well as its Form 10-K for the year ending December 31, 2024.

As part of the transaction, the Company assigned to Ellis Smith, a director of the Company, and Hollister & Blacksmith, Inc., a Colorado corporation, all liabilities and licenses associated with the Naturaleaf transaction, including Medical Marijuana Center Licenses, a Medical Marijuana-Infused Product Manufacturer License, and a Medical Marijuana Optional Premises Cultivation License. Smith and Hollister & Blacksmith agreed to assume, jointly and severally, all related liabilities and indemnify the Company against any claims, debts, or obligations, known or unknown, arising from the Naturaleaf transaction.

Additionally, Ellis Smith agreed to release the Company from obligations under two promissory notes issued to him on November 22, 2022, and February 14, 2023, including all principal, accrued interest, and penalties. Smith also guaranteed the resolution of all assigned liabilities and provided indemnification for the Company.

Note 18. Subsequent Events

On November 4, 2024, American Cannabis Company, Inc. (“Company”) entered into a material definitive agreement with KTEC, LLC, a Delaware limited liability company formerly known as TEC, LLC (“KTEC”), for the sale of 302,900,458 shares of common stock for $310,000. The transaction was structured with the following components:

1. Use of Proceeds:

The agreement requires the Company to allocate at least $135,000 of the proceeds toward outstanding obligations owed to Medihemp, LLC, SLAM Enterprises, LLC, and Medical Cannabis Caregivers, Inc., arising from the Company’s 2021 acquisition of assets and subsequent amendments in 2022 and 2023. The remaining proceeds will be used to:

• File delinquent Form 10-Qs for the quarters ended June 30, 2024, and September 30, 2024.

• File the Form 10-K for the year ended December 31, 2024.

• Resubmit a 15c2-11 application with FINRA for reinstatement on OTC Markets.

2. Assignment of Licenses:

At closing, and subject to regulatory approval from the Colorado MED, the Company will divest all cannabis-related licenses to Ellis Smith, a director of the Company, and Hollister & Blacksmith, Inc., a Colorado corporation.

3. Assignment of Liabilities:

Upon closing, the Company will assign, and Ellis Smith and Hollister & Blacksmith, Inc. will assume, jointly and severally, all known and unknown liabilities of the Company, whether fixed or contingent, up to the closing date. Smith and Hollister & Blacksmith will indemnify the Company against any claims, debts, or obligations arising from these liabilities.

Ellis Smith has provided a personal guarantee covering the full and timely performance of all liabilities assumed under the transaction. This guarantee includes all known and unknown liabilities, whether fixed or contingent, and remains enforceable in the event of bankruptcy or insolvency involving Smith and/or Hollister & Blacksmith. Smith waived all defenses, consented to acceleration of obligations upon any bankruptcy filing, and indemnified the Company’s officers, directors, shareholders, and affiliates against future claims related to the assumed liabilities.

4. Release of Promissory Notes:

Upon closing, Ellis Smith will release the Company from all obligations under two promissory notes issued on November 22, 2022, and February 14, 2023, including all principal, accrued interest, and penalties.

5. Closing Conditions:

The closing of the transaction is contingent upon the successful filing of the Company’s Form 10-Qs for the quarters ended June 30, 2024, and September 30, 2024, its Form 10-K for the year ended December 31, 2024, the completion of its 15c2-11 filing, and approval of the Colorado MED for the license transfer.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The statements contained in this report that are not statements of historical fact, including, without limitation, statements containing the words “believes,” “expects,” “anticipates,” and similar words constitute forward-looking statements that are subject to several risks and uncertainties. From time to time, we may make other forward-looking statements. Investors are cautioned that such forward-looking statements are subject to an inherent risk that actual results may materially differ because of many factors, including the risks discussed from time to time in this report, including the risks described under “Risk Factors” in any filings we have made with the SEC.

Government Regulation

Currently, there are thirty-eight states plus the District of Columbia that have laws and/or regulations that recognize in one form or other legitimate medical uses for cannabis in connection with medical treatment. There are currently twenty-four states and the District of Columbia that allow recreational use of cannabis. As of June 30, 2024, the policy and regulations of the Federal Government and its agencies are that cannabis has no medical benefit and a range of activities, including cultivation and use of cannabis for personal use is prohibited on the basis of federal law and may or may not be permitted on the basis of state law. Active enforcement of the current federal regulatory position on cannabis on a regional or national basis may directly and adversely affect the willingness of customers of the Company’s medicinal cannabis products to invest in or buy products. Active enforcement of the current federal regulatory position on cannabis may thus indirectly and adversely affect the revenues and profits of the Company.

Our discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. On an ongoing basis, we evaluate these estimates, including those related to the useful lives of real estate assets, bad debts, impairment, net lease intangibles, contingencies, and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. There can be no assurance that actual results will not differ from those estimates.

BACKGROUND

American Cannabis Company, Inc. and subsidiary company, Hollister & Blacksmith, Inc., doing business as American Cannabis Consulting (“American Cannabis Consulting”), (collectively “the “Company”, “we”, “us”, or “our”) are based in Denver, Colorado and operate a fully integrated business model that features end to end solutions for businesses operating in the regulated cannabis industry in states and countries where cannabis is regulated and/or has been decriminalized for medical use and/or legalized for recreational use. The Company provides advisory and consulting services specific to this industry and manufactures proprietary industry solutions, including; the Satchel™, SoHum Living Soils™, Cultivation Cube™, and the High-Density Cultivation System.™ The Company also sells 3rd party industry-specific products and manages a strategic group partnership that offers both exclusive and nonexclusive customer products commonly used in the industry. American Cannabis Company, Inc. is a publicly listed company quoted on the OTCQB Tier under the symbol “AMMJ”.

Naturaleaf Acquisition

Naturaleaf agreed to sell or assign to the Company, and the Company purchased and was the assignee of the following assets:

Three Medical Marijuana (MMC) Store Licenses;

One Marijuana Infused Product Licenses (MIPS); and,

One Option Premises Cultivation License (OPC); and,

Related real property assets, goodwill, and related business assets.

As a result, the Company has expanded its business model to include the cultivation and retail sale of cannabis in the medicinal cannabis industry.

1. Use of Proceeds:

• File delinquent Form 10-Qs for the quarters ended June 30, 2024, and September 30, 2024.

• File the Form 10-K for the year ended December 31, 2024.

• Resubmit a 15c2-11 application with FINRA for reinstatement on OTC Markets.

2. Assignment of Licenses:

3. Assignment of Liabilities:

4. Release of Promissory Notes:

5. Closing Conditions:

RESULTS OF OPERATIONS

AMERICAN CANNABIS COMPANY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Period Ended
	June 30, 2024			June 30, 2023			Increase (Decrease)
Revenues
Consulting Services	$	29,958		$	468,500			(438,542	)
Product & Equipment		104,389			737,759			(633,370	)
Cannabis Products		553,252			358,856			194,396
Total Revenues		687,599			1,565,115			(877,516	)

Cost of Revenues
Cost of Consulting Services		—			103,085			(103,085	)
Cost of Products and Equipment		89,392			507,646			(418,254	)
Cost of Cannabis Products		795,616			311,488			484,128
Total Cost of Revenues		885,008			922,219			(37,211	)
Gross Profit		(197,409	)		642,896			(840,305	)

Operating Expenses
General and Administrative		481,444			1,081,600			(600,156	)
Selling and Marketing		6,684			117,384			(110,700	)
Stock Based Compensation Expense		—			17,021			(17,021
Total Operating Expenses		488,128			1,216,005			(727,877	)
Loss from Operations		(685,537	)		(573,109	)		(112,428	)

Other Income (Expense)
Interest (expense)		(89,982	)		(64,363	)		(25,620	)
Gain on Fair Market Value of Derivatives		3,080			—			3,080
Other income		3,717			186,316			(182,598	)
Total Other (Expense) Income		(83,185	)		(121,953	)		(205,138	)
Net Loss		(768,722	)		(456,156	)		(317,566	)
Income Tax Expense		—			—			—
NET LOSS	$	(768,722	)	$	(456,156	)		(317,566	)

Revenues

Total revenues were $687,599 for the six months ended June 30, 2024, as compared to $1,565,115 for the six months ended June 30, 2023, a decrease of $877,516. The decreases were caused by reduced consulting revenues and product and equipment revenues of $438,542 and $633,370, respectively, resulting from market saturation, increased competition, and reduced demand for products and consulting.

Costs of Revenues

For the six months ended June 30, 2024, our total costs of revenues were $885,009 compared to $922,219 for the six months ended June 30, 2023. This represents a significant reduction of $37,210. The decrease in the cost of revenues was a direct result of several key factors, including reduced costs related to equipment sales attributable to lower sales volume, improved efficiencies in the cultivation process, lower costs for supplies in response to demand, and streamlined operations which have had the effect of increasing operational efficiencies and reducing costs.

Consulting Services

Consulting service revenues during the six months ended June 30, 2024, were $29,958 versus $468,500 for the six months ended June 30, 2023, a decrease of $438,542. The decrease is due to the unpredictable demand for cannabis consulting services, driven by evolving and uncertain regulations, the uncertain adoption of new cannabis initiatives by states, and the highly competitive and oversaturated market for cannabis services, resulting in an overall decline in the demand for consulting services.

Costs of Consulting Services

Consulting service costs were $0 and $103,085 compared to the six months ended June 30, 2024, and 2023, respectively. Costs associated with consulting services decreased due to market saturation, increased competition, and reduced demand for products and consulting.

Soil Product and Equipment Revenues

Our product and equipment revenues for the six months ended June 30, 2024, were $104,389, compared to $737,759 for the six months ended June 30, 2023, a decrease of $633,370. This decrease was due to our lack of soil sales and a reduction in the number of consulting engagements requiring the ordering of related equipment.

Costs of Products and Equipment were $89,392 and $507,646 during the six months ended June 30, 2024, and 2023, respectively. Costs associated with products and equipment decreased as a result of our lack of soil sales and a reduction in the number of consulting engagements requiring the ordering of related equipment.

Cannabis Product Revenues

Cannabis product revenues for the six months ended June 30, 2024, were $553,542, compared to $358,856 for the six months ended June 30, 2023. The increase of $194,396 represents an increase in the retail cannabis market in 2024 compared to 2023.

Costs associated with cannabis products consist of those incurred in cultivating the plants and selling them retail. For the six months ended June 30, 2024, such costs were $795,616, compared to $311,488 for the six months ended June 30, 2023, an increase of of $484,128 reflecting a reduction for inventory obsolescence.

Gross Profit

Total gross profit for the six months ended June 30, 2024, was a gross loss of $197,409, down from a gross profit of $642,896 in the same period in 2023, a decrease of $840,305. The 2024 gross profit for six months included $29,958 from consulting services, $14,997 from products and equipment, and a gross loss of $242,364 from cannabis products. In comparison, the 2023, gross profit included $365,415 from consulting services, $230,113 from products and equipment, and $47,368 from cannabis products. The decrease in gross profit is primarily attributed to the reduction of inventory for Cannabis products which was adjusted for inventory obsolecense of $484,674.

Operating Expenses

Total operating expenses for the six months ended June 30, 2024, were $488,128, compared to $1,216,005 for the same period in 2023. The decrease is mainly due to decreased general and administrative costs and selling and marketing costs.

Other Income (Expense)

Other expenses for the six months ended June 30, 2024, were $83,185 compared to other income of $121,953 for the six months ended June 30, 2023. The decrease is a direct result of an increase in interest expense.

Net Loss

Net loss for the six months ended June 30, 2024, was $768,722, as compared to a net loss of $456,156 for the six months ended June 30, 2023.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2024, our primary internal sources of liquidity were our working capital, which included cash and cash equivalents of $2,747 and accounts receivable of $136,624. Management continues to investigate opportunities for financing to support operations and growth, and expects that the Company’s transaction with TEC, LLC will provide the necessary funding to complete its reporting obligations and advance its 15c2-11 application with FINRA. Management believes this strategy will adequately provide the necessary liquidity and capital resources to fund our operational general, and administrative expenses for at least the next 12 months.

Operating Activities

Net cash provided by operating activities for the six months ended June 30, 2024, was $19,484, as compared to net cash used in operating activities of $171,362 for the six months ended June 30, 2023. Decrease in cash used was a result of the decreases in inventory and account receivable and increases in accounts payable and accrued liabilities.

Investing Activities

For the six months ended June 30, 2024, and 2023, investing activities resulted in net cash used of $0 and $39,101, respectively.

Financing Activities

During the six months ended June 30, 2024, and 2023, cash used in financing activities was $37,822 and proceeds provided by financing activities was $185,660, respectively.

Off-Balance Sheet Arrangements

As of June 30, 2024, and December 31, 2023, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Non-GAAP Financial Measures

We use Adjusted EBITDA, a Non-GAAP metric, to monitor our overall business performance. We define Adjusted EBITDA as net income (loss) before interest expense, net, provision for (benefit from) income taxes, stock-based compensation, and certain nonrecurring expenses, which to date have been limited to costs associated with the Reverse Merger. We believe that such adjustments to arrive at Adjusted EBITDA provides us with a more comparable measure for managing our business. We also believe that it is a useful measure for securities analysts, investors, and other interested parties in the evaluation of our Company.

A reconciliation of net income(loss) to Adjusted EBITDA is provided below:

	Six Months			Six Months
	Ended June 30, 2024			Ended June 30, 2023

Adjusted EBITDA reconciliation:
Net loss	$	(768,722	)	$	(451,156	)
Depreciation and Amortization		131,667			121,449
Interest Expense		89,983			64,363
Stock-based compensation to employees		—			17,021
Stock issued for services		—			—
Adjusted EBITDA	$	(547,072	)	$	(248,323	)

ITEM 3. QUANTITATIVE & QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting Company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer/Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

We carried out an evaluation under the supervision and with the participation of management, including our Chief Executive Officer/Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2024, the end of the period covered by this Report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses discussed below.

Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive officer and principal financial officer and effected by the Board, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that:

●

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets,

●

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that our receipts and expenditures of are being made only in accordance with authorizations of our management and directors; and

●

provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Because of our inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Management identified the following material weaknesses:

● we do not have an Audit Committee – While not being legally obligated to have an Audit Committee, it is the management’s view that such a committee, including a financial expert board member, is an utmost important entity-level control of the Company’s financial statements. Currently, the Board of Directors acts in the capacity of the Audit Committee and does not include a member that is considered to be independent of management to provide the necessary oversight over management’s activities.

●

we have not performed a risk assessment and mapped our processes to control objectives.

●

we have not implemented comprehensive entity-level internal controls.

●

we have not implemented adequate system and manual controls; and

●

we do not have sufficient segregation of duties.

Our management assessed the effectiveness of internal control over financial reporting as of June 30, 2024. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organization of the Treadway Commission (“COSO”) in Internal Control–Integrated Framework (2013). Based on management’s assessment, management concluded that the above material weaknesses have not been remediated and, accordingly, our internal control over financial reporting is not effective as of June 30, 2024.

Remediation of Material Weaknesses

●

We have designed and plan to implement, or in some cases have already implemented, the specific remediation initiatives described below:

●

We intend to allocate resources to perform a risk assessment and map processes to control objectives and, where necessary, implement and document internal controls in accordance with COSO.

●

Our entity-level controls are, generally, informal and we intend to evaluate current processes, supplement where necessary, and document requirements.

●

While we have implemented procedures to identify, evaluate and record significant transactions, we need to formally document these procedures and evidence the performance of the related controls.

●

We plan to evaluate system and manual controls, identify specific weaknesses, and implement a comprehensive system of internal controls.

PART II—OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

ITEM 1A.

RISK FACTORS

We are a smaller reporting Company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the six months ended June 30, 2024, the Company issued the following unregistered securities in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933 for conversion of an outstanding note payable:

On March 6, 2024, the Company issued 2,017,125 shares of common stock in conversion of a note.

On January 17, 2024, the Company issued 4,319,628 shares of common stock in conversion of a note.

On January 11, 2024, the Company issued 5,000,000 shares of common stock in conversion of a note.

On January 8, 2024, the Company issued 3,061,224 shares of common stock in conversion of a note.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

No senior securities were issued and outstanding during the three months ended March 31, 2024, and 2023.

ITEM 4.

MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5.

OTHER INFORMATION

None.

ITEM 6.

EXHIBITS

This list is intended to constitute the exhibit index.

10.1	Stock Purchase Agreement [Filed herewith]

10.2	Escrow Agreement [Filed herewith]

10.3	Assignment and Assumption Agreement [Filed herewith]

10.3.1

Schedule A to Assignment and Assumption Agreement [Filed herewith]

10.3.2

Personal Guarantee Ellis Smith [Filed herewith]

10.4	Settlement and Release, Saunders [Filed herewith]

10.5	First Amendment to Settlement and Release, Saunders [Filed herewith]

31.1	Certification of Principal Executive & Financial Officer as required by Rule 13a-14 or 15d-14 of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Principal Executive & Financial Officer Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes0Oxley Act of 2002.
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*

*Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities and Exchange Act of 1934, and otherwise are not subject to liability under those sections.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

AMERICAN CANNABIS COMPANY, INC.

Date: February 11, 2025

By:

/s/ Joseph Cleghorn

Joseph Cleghorn,

Chief Executive Officer & Interim Chief Financial Officer

Exhibit 10.1

STOCK PURCHASE AGREEMENT

by and among

HOLLISTER & BLACKSMITH, INC., a Colorado Corporation dba

AMERICAN CANNABIS COMPANY, INC., a Delaware Corporation

and

TEC, LLC, a Delaware Limited Liability Company

dated as of

November 1, 2024

Page 1 of 32

This Stock Purchase Agreement (this “Agreement”), dated as of November 1, 2024, is entered into by and among Hollister & Blacksmith, Inc., a Colorado corporation (“Hollister & Blacksmith”) doing business as American Cannabis Company, Inc., a Delaware corporation (“Seller,” or, the “Company”), and TEC, LLC, a Delaware limited liability company (“Buyer”).

Additionally, due to the secured interests held by Medihemp, LLC (“Medihemp”) and its wholly owned subsidiaries, SLAM Enterprises, LLC (“SLAM”) and Medical Cannabis Caregivers, Inc. (“Medical Cannabis”) (each formed and operating in their respective states of formation or corporation, and collectively referred to as the “Saunders Entities”), over certain assets of the Seller, the Saunders Entities are hereby joined to this Agreement as third-party beneficiaries. The Saunders Entities are controlled by Roger Scott Saunders. Seller, Buyer, Hollister & Blacksmith, and the Saunders Entities may collectively be referred to as the “Parties.”

RECITALS

WHEREAS, the Seller is a corporation formed and operating in good standing under the laws of the State of Delaware. Seller is authorized to issue a total of five hundred million (500,000,000) shares of common stock, par value of $0.00001 per share (“Shares”);

WHEREAS, Seller is a reporting company under the 1934 Securities and Exchange Act. As of the date of this Agreement, the Seller is delinquent in its filing obligations to the Securities and Exchange Commission (“SEC”) and has not filed its quarterly report on Form 10-Q for the period ending June 30, 2024. Seller’s common stock is traded on the OTC Expert Market under the trading symbol “AMMJ.”

WHEREAS, as a result of Seller’s failure to file its quarterly report on Form 10-Q for the period ending June 30, 2024, by October 15, 2024, OTC Markets informed the Seller that its common stock would be removed from the Pink Sheets OTC Markets tier and temporarily placed on the Expert Market tier. This transition resulted in the loss of the Seller’s SEC Rule 15c2-11 submission, which governs the requirements for a broker-dealer to publish quotes for over-the-counter (OTC) securities. OTC Markets has informed the Seller that once its delinquent SEC filing for the June 30, 2024 (and prospectively its September 30, 2024 quarter) quarter is completed, its listing will be restored to the Pink Sheets tier. However, the Seller must resubmit its application for SEC Rule 15c2-11 approval.

WHEREAS, as of the date of this Agreement, there were 185,800,915 shares of the Seller’s common stock outstanding;

WHEREAS, Hollister & Blacksmith is a corporation formed and operating in good standing under the laws of the State of Colorado. It is a wholly owned subsidiary of Seller with no assets and no operations. It is controlled by Ellis Smith, the Chief Executive and Chief Financial Officer of Seller.

Page 2 of 32

WHEREAS, Buyer, a limited liability company organized under the laws of the State of Delaware, desires to purchase from Seller, and Seller desires to sell to Buyer the Shares on the terms and subject to the conditions set forth in this Agreement;

WHEREAS, the Saunders Entities are business entities formed and operating in good standing under the laws of their respective states of formation or corporation. The Saunders Entities hold UCC-1 Financing Statements concerning Secured Assets resulting from the Saunders Transaction. The Saunders Entities are controlled by Roger Scott Saunders.

WHEREAS, as a result of the transactions contemplated by this Agreement, upon closing, the Buyer shall obtain voting control over a majority of Seller’s issued and outstanding shares, and a change of control of Seller shall occur. Consistent with the terms and conditions of this Agreement, the Saunders Entities will maintain its secured interests in the Secured Assets Seller acquired in the Saunders transaction, as is more fully described below.

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

The following terms have the meanings specified or referred to in this Article I:

“Act” means the 1934 Securities and Exchange Act, as amended from time to time.

“Action” means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena, or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity.

“Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“Agreement” means this Stock Purchase Agreement, including the Recitals, which are a material part hereof and may be used to interpret and enforce this Agreement.

“Ancillary Documents” means (i) the Escrow Agreement between Seller, Buyer, and Mailander Law Office, Inc. (the “Escrow Agent”), as amended; (ii) Seller’s reports filed with the SEC; (iii) all Exhibits and Schedules referenced in this Agreement; and, (iv) any other transaction documents necessary to consummate the sale of the Shares to Buyer.

Page 3 of 32

“Assigned Liabilities” means those liabilities set forward on Schedule “A,” including any and all secured and unsecured liabilities, amounts owed to creditors, debts, obligations, costs, attorney fees, liabilities, or claims arising from the Assigned Liabilities, whether known or unknown, contingent or accrued, and all outstanding amounts due to the Saunders Entities, and any other creditors, as well as any secured interests held by the Saunders Entities, which have been perfected by UCC-1 financing statements over Assigning Party’s Cannabis Licenses

“Audited Financial Statements” has the meaning set forth in Section 3.06.

“Business Day” means any day except Saturday, Sunday, or any other day on which commercial banks located in Denver, Colorado, are authorized or required to be closed for business.

“Buyer” means TEC, LLC.

“Buyer Indemnitees” has the meaning set forth in Section 7.02.

“Closing” means after this Agreement is signed by the Buyer and Seller; Buyer’s concurrent payment of the Purchase Price to the Escrow Agent; and Seller’s issuance of three hundred and two million, nine hundred thousand, four hundred and fifty-eight (302,900,458) Shares of Seller common stock (the “Shares”), in exchange for Three Hundred and Ten Thousand Dollars ($310,000) (a price of $0.0011123 per Share), for delivery to Buyer upon directions supplied by Buyer herein, all pursuant to the terms and conditions outlined in this Agreement and the Ancillary Documents, and conditioned upon (a) the receipt of Contingent Approval Letters of the Change of Ownership from the Colorado Department of Revenue (1 CCR 212-3:2-245 pursuant to 1 CCR 212-3:2-245 (A) & (D), Marijuana Enforcement Division, and the City of Colorado Springs, the Licenses associated with the Saunders Transaction and the Secured Assets

“Code” means the Internal Revenue Code of 1986, as amended.

“Commission” means the United States Securities and Exchange Commission, or the “SEC.”

“Common Stock” has the meaning set forth in Section 3.03(a).

“Company” has the meaning set forth in the Recitals.

“Direct Claim” has the meaning set forth in Section 7.05(c).

“Disclosure Schedules” means the Disclosure Schedules delivered by Seller to Buyer concurrently with the execution and delivery of this Agreement.

“Dollars or $” means the lawful currency of the United States.

“Encumbrance(s)” means any charge, claim, community property interest, pledge, condition, equitable interest, lien (statutory or other), option, security interest, mortgage, easement, encroachment, right of way, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.

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“Escrow Agent” means Mailander Law Office, Inc.

“Escrow Account” means the Escrow Agent’s IOLTA (interest on lawyer trust account) account.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Financial Statements” has the meaning set forth in Section 3.06.

“FINRA” means the Financial Industry Regulatory Authority.

“GAAP” means United States generally accepted accounting principles in effect from time to time.

“Governmental Authority” means any federal, state, local, or foreign government or political subdivision thereof, or any agency or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.

“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation, determination, or award entered by or with any Governmental Authority.

“Indemnified Party” has the meaning set forth in Section 7.04.

“Indemnifying Party” has the meaning set forth in Section 7.04.

“Interim Financial Statements” has the meaning set forth in Section 3.06.

“Knowledge of Seller or Sellers’s Knowledge” or any other similar knowledge qualification means the actual or constructive knowledge of Sellers after due inquiry.

“Law” means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement, or rule of law of any Governmental Authority.

“Liabilities” has the meaning set forth in Section 3.07.

“Licenses” means licenses issued by the Colorado Marijuana Enforcement Division, including 403-00070, 402-00539, 402-01065, 402-00053, and 404-00312, and the corresponding City of Colorado Springs licenses.

“Losses” means losses, damages, liabilities, deficiencies, Actions, judgments, interest, awards, penalties, fines, costs, or expenses of whatever kind, including reasonable attorneys’ fees and the cost of enforcing any right to indemnification hereunder and the cost of pursuing any insurance providers; provided, however, that “Losses” shall not include punitive damages, except to the extent awarded to a Governmental Authority or other third party.

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“Person” means an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization, trust, association, or other entity.

“Purchase Price” has the meaning set forth in Section 2.02.

“Representative” means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants, and other agents of such Person.

“Restricted Securities” means securities acquired directly or indirectly from the issuer thereof or from an affiliate of such issuer in a transaction or chain of transactions not involving any public offering. The public sale or distribution of such securities is restricted under the Securities Act of 1933 until the securities are registered or an exemption from registration becomes available.

“Rule 144” means Rule 144 of the Securities and Exchange Act of 1933, which provides an exemption from the registration requirements of Section 5 of the Act when securities have been acquired from the issuer or an affiliate of the issuer in a non-public offering, and all subparts of Rule 144 have been satisfied. Rule 144 provides that any person (affiliate or non-affiliate) who sells restricted securities for his own account, or any person (broker) who sells restricted or unrestricted securities for the account of an affiliate of the issuer in compliance with the applicable conditions “shall be deemed not to be an underwriter of those securities within the meaning of Section 2(a)(11) of the Act.” By interpreting the terms “underwriter,” “distribution,” and “brokers' transactions” in Sections 4(a)(1), 2(a)(11), and 4(a)(4), respectively, the Commission has provided a basis for sellers to claim a trading exemption under Section 4(a)(1) and brokers to claim a special brokers' exemption under Section 4(a)(4).

“Saunders Entities” means Medihemp, LLC (“Medihemp”) and its wholly owned subsidiaries SLAM Enterprises, LLC (“SLAM”) and Medical Cannabis Caregivers, Inc. (“Medical Cannabis”), and Roger Scott Saunders (“Saunders”), an individual and control person of Medihemp, SLAM, and Medical Cannabis respectively, including his successors, assigns, agents, officers, directors, managers, and all persons acting by or through Saunders.

“Saunders Transaction” means the Seller’s acquisition of assets from the Saunders Entities on March 11, 2021, as amended on April 29, 2022, and June 8, 2023, of fixed assets and associated intellectual property, including the following Licenses issued by the Colorado Marijuana Enforcement Division (“MED”) and the corresponding City of Colorado Springs (“City”): (i) Medihemp’s, SLAM’s and Medical Cannabis’ respective Medical Marijuana Center Licenses; (ii) Medical Cannabis’ Medical Marijuana Infused Product Manufacturer License; and, (iii) Medical Cannabis’ Medical Marijuana Optional Premises Cultivation License.

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“SEC Reports” means filings mandated by federal securities laws, particularly under the Securities Act and the Exchange Act. These reports ensure that public companies provide full and fair disclosure of material information necessary for investors to make informed decisions. The Exchange Act specifically requires ongoing disclosures through periodic filings, including but not limited to annual reports (Form 10-K), quarterly reports (Form 10-Q), and current reports (Form 8-K).

“SEC Rule 15c2-11” refers to the procedure required under Rule 15c2-11 of the Securities Exchange Act of 1934, as amended, whereby a broker-dealer, acting as a market maker, submits a Form 211 to FINRA in order to initiate or resume public quotations for securities on the over the counter (OTC) market. This process includes but is not limited to, the submission of current financial statements, disclosure documents, and other materials necessary for the broker-dealer to establish that it has a reasonable basis for quoting the security. The successful completion of the 15c2-11 process is required for securities to be publicly quoted on OTC markets following a lapse in trading or to initiate such trading.

“Secured Assets” means those assets of Seller for which the Saunders Entities have a secured UCC financing statement interest consisting of “All of the business Assets and all replacements, substitutions, accessions, additions, and improvements thereto; all Licenses issued by the Colorado Marijuana Enforcement Division, specifically 403-00070 402-00539, 402-01065, 402-00053, and 404-00312 and the corresponding City of Colorado Springs Licenses; and, all proceeds and products of each of the foregoing, all books and records relating to the foregoing, all supporting obligations related thereto, and all accession to, substitutions and replacements for, and rents, profits and products of, each of the foregoing, and any and all Proceeds of any insurance, indemnity, warranty or guaranty payable to the Grantor from time to time with respect to any of the foregoing. Notwithstanding the foregoing, the Collateral shall not include marijuana, marijuana plants, or marijuana products.”

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Seller” means American Cannabis Company, Inc.

“Sellers Indemnitees” has the meaning set forth in Section 7.02.

“Shares” has the meaning set forth in the recitals.

“Taxes” means all federal, state, local, foreign, and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties.

“Third Party Claim” has the meaning set forth in Section 7.04(a).

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the OTC Expert Market, OTCPINK, OTCQB, or OTCQX (or any successors to any of the foregoing).

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ARTICLE II

PURCHASE AND SALE

Section 2.01 Purchase and Sale. Subject to the terms and conditions set forth herein, at the Closing, Seller shall sell to Buyer, and Buyer shall purchase from Seller three hundred and two million, nine hundred thousand, four hundred and fifty-eight (302,900,458) Restricted Securities free and clear of all Encumbrances, for the consideration specified in Section 2.02.

Section 2.02 Purchase Price. The aggregate purchase price for the Restricted Securities shall be Three Hundred and Ten Thousand Dollars ($310,000) (or $0.001023 per share) (the “Purchase Price”).

(i)

Buyer shall pay the Purchase Price as follows:

Within three business days after the execution of this Agreement, Buyer shall deposit twenty-five thousand dollars ($25,000) (the “Initial Deposit”) into the IOLTA Account with the Escrow Agent pursuant to an Escrow Agreement (see “Exhibit A,” Escrow Agreement.) This deposit shall be non-refundable, and Seller shall authorize the Escrow Agent to disburse from the Initial Deposit the following sums:

Hudgens CPA PLLC: Eighteen Thousand Dollars ($18,000). This sum represents the current balance due Hudgens of (1) six thousand dollars ($6,000) for the March 31, 2024, 10-Q SEC filing; (2) six thousand dollars ($6,000) for the June 30, 2024, 10-Q SEC filing; and, (3) six thousand dollars ($6,000) for the September 30, 2024, 10-Q SEC filing. See “Exhibit B,” Hudgens Invoice.

ii.

SEC Filing Solutions LLC: Two Thousand Dollars ($2,000).

iii.

H-Squared Performance Financial: Five Thousand Dollars ($5,000).

Concurrent with the Initial Deposit, Ellis Smith shall concurrently resign as Seller’s sole officer and director, and Joseph Cleghorn shall be appointed director, president, secretary, treasurer, Chief Executive Officer, and Chief Financial Officer. Seller shall update its Statement of Information with the Secretary of State of Delaware to reflect these changes and the OTC Markets record and file Form 8-K with the SEC.

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(ii)

Within three business days after Seller completes the filing of its Form 10-Q Quarterly reports for the periods ending June 30, 2024, and September 30, 2024, Buyer shall deposit with the Escrow Agent the sum of one hundred and fifty thousand dollars ($150,000) (“Second Deposit”). The Second Deposit shall be non-refundable, and the Seller shall instruct and authorize the Escrow Agent, as set forward in Section 3 in the Escrow Agreement, to disburse from the Second Deposit fees due to Hudgens CPA PLLC for the annual audit, outstanding legal fees to Seller’s counsel for legal services rendered to date, and payments to H Squared Performance Financial and SEC Filing Solutions to ensure that the Seller’s annual report on Form 10-K is filed timely and within the guidelines set forth in the Exchange Act. Additionally, from the outstanding balance left from the Second Deposit, the Escrow Agent is directed to (i) provide an accounting to the Parties, (ii) engage Glendale Securities or other FINRA registered broker-dealer to file a 15c2-11 application on behalf of Seller to FINRA, and to reimburse costs for legal and accounting for the 15c2-11 submission. The Parties acknowledge that the estimates provided for completing the 15c2-11 process are subject to change, and the remaining balance of the Second Deposit may not be sufficient to cover all related costs. The Parties agree to compensate the Escrow Account for any deficiency in funds necessary to complete the 15c2-11 process, ensuring all costs are fully covered, and acknowledge that the Purchase Price balance may be affected by any additional 15c2-11 fees incurred.

(iii)

Resolution of Outstanding Amounts Due to the Saunders Entities.

As a result of the Saunders Transaction, the Seller is indebted to the Saunders Entities in the approximate total amount as of October 8, 2024, of five hundred and twenty-nine thousand sixty-three dollars ($529,063).

The Saunders Entities filed UCC Security Agreements against the Secured Assets on May 9, 2023, and June 4, 2024 (see Exhibit “C,” UCC-1 Filings).

Seller, Buyer, Hollister & Blacksmith, and the Saunders Entities have engaged in good faith negotiations regarding the terms and conditions for Seller’s disposition of all Licenses, including the Secured Assets subject to Saunders’ UCC-1 security interest, as well as any associated liabilities and all sums due and owing to the Saunders Entities arising from the Saunders Transaction.

At the Closing, Seller shall assign to Hollister & Blacksmith and Ellis Smith, and Hollister & Blacksmith and Ellis Smith shall assume, jointly and severally, conditioned upon (a) the receipt of Contingent Approval Letters of the Change of Ownership from the Colorado Department of Revenue (1 CCR 212-3:2-245 pursuant to 1 CCR 212-3:2-245 (A) & (D), Marijuana Enforcement Division, and the City of Colorado Springs, the Licenses associated with the Saunders Transaction and the Secured Assets. The Saunders Entities and Hollister & Blacksmith and Ellis Smith agree to the filing of an amended UCC financing statement covering the Secured Assets assigned and assumed by Hollister & Blacksmith and Ellis Smith hereunder in favor of the Saunders Entities, thereby preserving the Saunders Entities original secured interests. Hollister & Blacksmith, Ellis Smith, and the Saunders Entities shall execute a release of all claims, releasing the Seller from all associated liabilities of any kind, known or unknown, including without limitation all costs, attorney fees, administrative fees, and License fees including the Saunders Transaction, which will all be assigned and assumed jointly and severally by Hollister & Blacksmith and Ellis Smith (See Exhibit “D,” Assignment and Assumption Agreement with Release).

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Section 2.03 Transactions to be Affected at the Closing.

(i)

After Seller files the Form 10-K for the year ended December 31, 2024, consistent with the Exchange Act, Buyer shall tender the balance of the Purchase Price, less any additional fees incurred because of the 15c2-11 application (see Section 2.02(ii), by wire transfer of immediately available funds the balance of the Purchase Price to the Escrow Agent’s IOLTA account. The Escrow Agent shall, consistent with the terms and conditions of the Escrow Agreement, disburse the balance of the Purchase Price as follows:

To the Saunders Entities: The balance of the purchase price, which shall be at least one hundred and thirty-five thousand dollars ($135,000.00) (See Exhibit “D,” Assignment and Assumption Agreement and Release).

Also, at the Closing, Seller shall concurrently deliver to Buyer:

(ii)

A copy of a resolution of the board of directors of Seller authorizing the issuance and delivery of the Shares to Buyer, along with any other ancillary documents required to affect the issuance and delivery; and,

(iii)

a legal opinion of Company counsel attesting to the legality of the issuance of the Shares and the Shares being fully paid, non-assessable, and non-cancelable; and,

(iv)

Confirmation of delivery of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver on an expedited basis via The Depository Trust Company Deposit or Withdrawal at Custodian system (“DWAC”) the Shares, registered in the name of Buyer.

Section 2.04 Closing. Subject to the terms and conditions of this Agreement, the purchase and sale of the Shares contemplated hereby shall take place at a closing (the “Closing”) to be held at 12:00 pm at the office of Seller or at such other time or on such other date or at such other place as mutually agreed by Seller and Buyer, conditioned upon (a) the receipt of Contingent Approval Letters of the Change of Ownership from the Colorado Department of Revenue (1 CCR 212-3:2-245 pursuant to 1 CCR 212-3:2-245 (A) & (D), Marijuana Enforcement Division, and the City of Colorado Springs, regarding the Licenses associated with the Saunders Transaction and the Secured Assets.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Buyer that the statements in this Article III are true and correct as of the date hereof.

Section 3.01 Authority of Seller. Seller has the full power and authority to enter into this Agreement and any Ancillary Documents to which it is a party, to carry out its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Seller of this Agreement, and any Ancillary Document to which Seller is a party, the performance by Seller of its respective obligations hereunder and thereunder, and the consummation by Seller of the transactions contemplated hereby and thereby, have been duly authorized by all requisite action on the part of Seller. This Agreement has been duly executed and delivered by Seller, and, assuming due authorization, execution, and delivery by Buyer, this Agreement constitutes a legal, valid, and binding obligation of Seller enforceable against Seller in accordance with its terms. When each other Ancillary Document to which Seller is or will be a party has been duly executed and delivered by Seller (assuming due authorization, execution, and delivery by each other party thereto), such Ancillary Document will constitute a legal and binding obligation of Seller enforceable against it respectively in accordance with its terms.

Section 3.02 Organization, Authority, and Qualification of Seller & Hollister & Blacksmith – Ancillary Representations. Seller is duly incorporated or otherwise organized, validly existing, and in good standing under the laws of the State of Delaware, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Seller is not in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws, or other organizational or charter documents. Seller is duly qualified to conduct business and are in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of its respective business is conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of this Agreement, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of Seller, taken as a whole, or (iii) a material adverse effect on Seller’s ability to perform in any material respect on a timely basis its respective obligations under this Agreement (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

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Section 3.03 Capitalization.

(a) Seller’s authorized capital stock consists of five hundred million (500,000,000) authorized common shares, par value of $0.00001 per share, of which 185,800,915 shares are issued and outstanding common shares as of October 21, 2024.

(b) All of the Shares were issued in compliance with applicable Laws. None of the Shares were issued in violation of any agreement, arrangement, or commitment to which Seller is a party or is subject to or in violation of any preemptive or similar rights of any Person.

Section 3.04 No Subsidiaries. Except for Hollister & Blacksmith, Inc., the Seller does not own or have any interest in any shares or ownership interest in any other Person or entity.

Section 3.05 No Conflicts; Consents. The execution, delivery, and performance by Seller of this Agreement and any related Ancillary Documents, along with the completion of the contemplated transactions, will not, except for notice to the Saunders Entities, (a) require any consent, notice, or action from any third party, conflict with, or result in a situation where, with or without notice or the passage of time, any party could accelerate, terminate, modify, or cancel any contract to which Seller is bound; or (b) create any Encumbrance on the Shares. No consent, approval, permit, or government order is needed from Seller for the execution and delivery of this Agreement, the Ancillary Documents, or the completion of the contemplated transactions.

Section 3.06 Financial Statements. Buyer has had access to complete copies of Seller’s audited financial statements as of December 31, 2023, in Seller’s Form 10-K annual report filed with the SEC on May 8, 2024, and all of the representations, risk factors, financial information and related disclosures contained in Seller’s historical filings with the SEC; the foregoing including, but not limited to Seller’s the balance sheet and the related statements of income and retained earnings, and cash flow for the years ended December 31, 2023 and 2022 (the “Audited Financial Statements”), and the related statements of income and retained earnings, stockholders’ equity and cash flow for the periods then ended. The Financial Statements have been prepared in accordance with GAAP applied consistently throughout the periods involved, subject to normal and recurring year-end adjustments (the effect of which will not be materially adverse) and the absence of notes (that, if presented, would not differ materially from those presented in the Audited Financial Statements). The Financial Statements are based on the books and records of Seller and fairly present in all material respects the financial condition of Seller as of the respective dates they were prepared and the results of the operations of Seller for the periods indicated. Seller maintains a standard accounting system that has been established and administered per GAAP.

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(a) Seller has notified Buyer that it is currently delinquent with its filing obligations under the Exchange Act and that upon the mutual execution of this Agreement, and Buyer’s Initial Deposit and Second Deposit into Escrow Seller shall complete all quarterly reports for fiscal 2024, consisting of payments outstanding to the Seller’s auditor for the March 31, 2024, quarterly report, and for the prospective auditing fees for the June 30, 2024 quarter and the September 30, 2024 quarter, and the annual report for the year ended December 31, 2024, on Form 10-K, along with associated legal and accounting fees. Additionally, Seller has informed Buyer that as the result of Seller’s failure to file its quarterly report on Form 10-Q for the period ending June 30, 2024, OTC Markets informed Seller that its common stock would be removed from the Pink Sheets tier and placed temporarily on the Expert Market tier of OTC Markets, resulting in a loss of Seller’s SEC Rule 15c2-11 submission, which governs the requirements for a broker-dealer to publish quotes for over-the-counter (OTC) securities. OTC Markets represented to Seller that once its delinquent SEC filing for the June 30, 2024 (and prospectively the September 30 quarter) quarter is filed, its listing would be replaced to the Pink Sheets tier. However, the Seller must resubmit its application for SEC Rule 15c2-11 approval.

Section 3.07 Filings, Consents and Approvals. Other than providing notice to the Saunders Entities and making such filings as are required by the Exchange Act, including but not limited to the 15c2-11 submission to FINRA, Seller is not required to obtain any consent, waiver, authorization, or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local, or other governmental authority or other Person in connection with the execution, delivery, and performance of this Agreement.

Section 3.08 Issuance of the Shares. The Shares are duly authorized and, when issued and paid for in accordance with this Agreement, will be duly and validly issued, fully paid and nonassessable, free and clear of all Encumbrances imposed by Seller. The Seller shall reserve from its duly authorized capital stock the maximum number of shares of Common Stock issuable to the Buyer pursuant to this Agreement.

Section 3.09 SEC Reports; Financial Statements. With the exception of its June 30, 2024, and September 30, 2024, quarterly reports to the SEC on Form 10-Q, Seller has filed all reports, schedules, forms, statements, and other documents required to be filed by Seller under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Seller was previously a shell company as defined by Rule 144(i) but has since cured its previous shell status by compliance with Rule 144(i)(2). Seller’s financial statements included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with the United States generally accepted accounting principles applied consistently during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of Seller and Hollister & Blacksmith as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

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Section 3.10 Title to Assets. Seller has good and marketable title to all real property leased by it and good and marketable title in all personal property owned by it that is material to its business, in each case free and clear of all Encumbrances, except for (i) the Secured Assets related to the Saunders Transaction, (ii) Encumbrances as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by Seller and (ii) Any Encumbrances for the payment of federal, state or other taxes, for which appropriate reserves or payment plans have been made therefor in accordance with GAAP. Any real property and facilities held under lease by Seller are held under valid, subsisting, and enforceable leases with which Seller complies.

Section 3.11 Intellectual Property. Seller has, or has rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses, and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Seller has not received a notice (written or otherwise) that any of the Intellectual Property Rights has expired, terminated, or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement, except as could not have or reasonably be expected to result in a Material Adverse Effect. Seller has not received, since the date of the Audited Financial Statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect. All such Intellectual Property Rights are enforceable, and there is no existing infringement by another Person of any of the Intellectual Property Rights, except as could not have or reasonably be expected to result in a Material Adverse Effect. Seller has taken reasonable security measures to protect the secrecy, confidentiality, and value of its intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 3.12 Outstanding Liabilities. There are outstanding judgments against Seller for debts incurred in the ordinary course of business, unasserted or threatened claims, outstanding tax liabilities, and employment and operations liabilities (Schedule “A” Assigned Liabilities). Except for these items, the Seller has no material liabilities, obligations, or commitments of any nature, whether asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured (collectively, ‘Liabilities’), that would have a Material Adverse Effect on it, except for (a) those adequately reflected or reserved against in the balance sheet included in the Audited Financial Statements as of the date thereof, and (b) those incurred in the ordinary course of business consistent with past practice since the Balance Sheet Date, which is not, individually or in the aggregate, material in amount.

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(a) Pursuant to the terms and conditions of Exhibit “D,” Assignment and Assumption Agreement and Release, Hollister & Blacksmith, Inc. and Ellis Smith, jointly and severally, will assume all liability and related costs associated with the satisfaction of the Assigned Liabilities.

Section 3.13 Sarbanes-Oxley; Internal Accounting Controls. Except as set forth in the SEC Reports, Seller complies with all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. Except as set forth in the SEC Reports, Seller maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as set forth in the SEC Reports, Seller has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for Seller and designed such disclosure controls and procedures to ensure that information required to be disclosed by Seller in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the periods specified in the Commission’s rules and forms. Seller’s certifying officers have evaluated the effectiveness of Seller's disclosure controls and procedures as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). Seller presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date, determining that such controls and procedures were not effective. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of Seller that have materially affected, or is reasonably likely to affect materially, the internal control over financial reporting of Seller.

Section 3.14 Absence of Certain Changes, Events, and Conditions. Since the date of the Audited Financial Statements, and other than in the ordinary course of business consistent with past practice, there has not been, with respect to Seller, any:

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(a) event, occurrence, or development that has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

(b) Amendment of the charter, by-laws, or other organizational documents;

(d) issuance, sale, or other disposition of any of its capital stock, or grant of any options, warrants, or other rights to purchase or obtain (including upon conversion, exchange, or exercise) any of its capital stock;

(e) declaration or payment of any dividends or distributions on or in respect of any of its capital stock or redemption, purchase, or acquisition of its capital stock;

(f) a material change in any method of accounting or accounting practice of the Company, except as required by GAAP or as disclosed in the notes to the Audited Financial Statements;

(g) material change in the Company’s cash management practices and its policies, practices, and procedures with respect to collection of accounts receivable, establishment of reserves for uncollectible accounts, accrual of accounts receivable, inventory control, prepayment of expenses, payment of trade accounts payable, accrual of other expenses, deferral of revenue and acceptance of customer deposits;

(h) entry into any Contract that would constitute a Material Contract;

(i) incurrence, assumption, or guarantee of any indebtedness for borrowed money except unsecured current obligations and Liabilities incurred in the ordinary course of business consistent with past practice;

(j) transfer, assignment, sale, or other disposition of any of the assets shown or reflected in the Balance Sheet or cancellation of any debts or entitlements;

(k) transfer or assignment of or grant of any license or sublicense under or with respect to any material Company Intellectual Property or Company IP Agreements except non-exclusive licenses or sub-licenses granted in the ordinary course of business consistent with past practice;

(l) abandonment or lapse of or failure to maintain in full force and effect any material Company IP Registration, or failure to take or maintain reasonable measures to protect the confidentiality or value of any material Trade Secrets included in Seller Intellectual Property;

(m) material damage, destruction, or loss, whether or not covered by insurance to its property;

(n) any capital investment in, or any loan to, any other Person;

(o) other than has been reported in the SEC filings, any acceleration, termination, material modification to, or cancellation of any Material Contract to which Seller is a party or by which it is bound;

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(p) any material capital expenditures;

(q) imposition of any Encumbrance upon any of Seller’s properties, capital stock, or assets, tangible or intangible:

(r) (i) the grant of any bonuses, whether monetary or otherwise, or increase in any wages, salary, severance, pension, or other compensation or benefits in respect of its current or former employees, officers, directors, independent contractors or consultants, other than as provided for in any written agreements or required by applicable Law, (ii) change in the terms of employment for any employee or any termination of any employees for which the aggregate costs and expenses exceed ten thousand dollars ($10,000), or (iii) action to accelerate the vesting or payment of any compensation or benefit for any current or former employee, officer, director, independent contractor or consultant;

(s) hiring or promoting any person as an officer or director, hiring or promoting any employee except to fill a vacancy in the ordinary course of business;

(t) adoption, modification, or termination of any: (i) employment, severance, retention, or other agreement with any current or former employee, officer, director, independent contractor, or consultant, (ii) Benefit Plan or (iii) collective bargaining or other agreement with a Union, in each case whether written or oral;

(u) any loan to (or forgiveness of any loan to), or entry into any other transaction with, any of its stockholders or current or former directors, officers, and employees;

(v) entry into a new line of business or abandonment or discontinuance of existing lines of business;

(w) adoption of any plan of merger, consolidation, reorganization, liquidation, or dissolution or filing of a petition in bankruptcy under any provisions of federal or state bankruptcy Law or consent to the filing of any bankruptcy petition against it under any similar Law;

(x) purchase, lease, or other acquisition of the right to own, use, or lease any property or assets for an amount in excess of ten thousand dollars ($10,000);

(y) acquisition by merger or consolidation with, or by purchase of a substantial portion of the assets or stock of, or by any other manner, any business or any Person or any division thereof;

(z) action by Seller to make, change, or rescind any Tax election, amend any Tax Return or take any position on any Tax Return, take any action, omit to take any action, or enter into any other transaction that would have the effect of increasing the Tax liability or reducing any Tax asset of Buyer in respect of any Post-Closing Tax Period; or

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(aa) any Contract to do any of the foregoing, or any action or omission that would result in any of the foregoing.

Section 3.15 Material Contracts.

(a) Seller’s SEC Reports list all Material Contracts and other material documents currently in force concerning Seller.

(b) Each Material Contract is valid and binding on Seller in accordance with its terms and is in full force and effect. To Seller’s knowledge, no other party has provided any notice of any default or intention to terminate any Material Contract. No event or circumstance has occurred that, with notice or lapse of time or both, would result in a termination thereof. Complete and correct copies of each Material Contract (including all modifications, amendments and supplements thereto and waivers thereunder) have been made available to Buyer and are included in Seller’s SEC Reports.

Section 3.16 Litigation. To the knowledge of Seller, there is no pending action, suit, inquiry, notice of violation, proceeding, or investigation threatened against or affecting Seller or any of its properties before or by any court, arbitrator, governmental or administrative agency, or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Agreement or the Shares or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither Seller nor any director or officer thereof is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been and is not pending or contemplated any investigation by the SEC involving Seller or any current or former director or officer of the Company. The SEC has not issued any stop order or other order suspending the effectiveness of any registration statement filed by Seller under the Exchange Act or the Securities Act.

Section 3.17 Listing and Maintenance Requirements. The Shares are registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and Seller has taken no action designed to, or which, to its knowledge, is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has Seller received any notification that the SEC is contemplating terminating such registration. As the result of Seller’s failure to file its quarterly report on Form 10-Q for the period ending June 30, 2024, OTC Markets informed Seller that its common stock would be removed from the Pink Sheets tier and placed temporarily on the Expert Market tier of OTC Markets, resulting in a loss of Seller’s SEC Rule 15c2-11 submission, which governs the requirements for a broker-dealer to publish quotes for over-the-counter (OTC) securities. OTC Markets represented to Seller that once its delinquent SEC filing for the June 30, 2024, and the September 30, 2024 quarters are filed, its listing would be replaced to the Pink Sheets tier. However, the Seller must resubmit its application for SEC Rule 15c2-11 approval.

Section 3.18 No Integrated Offering. Assuming the accuracy of the Buyer’s representations and warranties set forth in Article IV, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Shares to be integrated with prior offerings by Seller for purposes of any applicable shareholder approval provisions of any Trading Market on which any of the securities of Seller are listed or designated.

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Section 3.19 Compliance With Laws; Permits. Except as set forth in the SEC Reports or in the Assigned Liabilities listed in Schedule A, Seller is not (i) in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by Seller under), nor has Seller received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) or has not been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

Section 3.20 Miscellaneous.

(a) Seller shall not sell or issue shares of its common stock at any price to any party other than Buyer, including the Seller’s principals, employees, and or vendors, for twenty-one (21) calendar days, beginning on the date of this agreement hereof.

(b) Seller has no obligation to convert or exchange any of its outstanding securities into freely tradeable shares of its common stock, at any price to any party, for a period of twenty-one (21) calendar days beginning on the date of this Agreement hereof.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller and Hollister & Blacksmith, that the statements contained in this Article IV are true and correct as of the date hereof.

Section 4.01 Organization and Authority of Buyer. Buyer is a limited liability company duly organized, validly existing, and in good standing under the Laws of Delaware. Buyer has full corporate power and authority to enter into this Agreement and Ancillary Documents to which Buyer is a party, to carry out its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Buyer of this Agreement and any Ancillary Document to which Buyer is a party, the performance by Buyer of its obligations hereunder and thereunder, and the consummation by Buyer of the transactions contemplated hereby and thereby, have been duly authorized by all requisite corporate action on the part of Buyer. This Agreement has been duly executed and delivered by Buyer, and it constitutes a legal, valid, and binding obligation of Buyer enforceable against Buyer in accordance with its terms.

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Section 4.02 No Conflicts; Consents. The execution, delivery, and performance by Buyer of this Agreement, and Ancillary Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby, do not and will not: (a) conflict with or result in a violation or breach of, or default under, any provision of the certificate of incorporation, by-laws or other organizational documents of Buyer; (b) conflict with or result in a violation or breach of any provision of any Law or Governmental Order applicable to Buyer; or (c) require the consent, notice or other action by any Person under any Contract to which Buyer is a party. No consent, approval, Permit, Governmental Order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to Buyer in connection with the execution and delivery of this Agreement, the Escrow Agreement and Ancillary Documents and the consummation of the transactions contemplated hereby and thereby.

Section 4.03 Investment Purpose. Buyer is acquiring the Shares solely for its own account for investment purposes and not with a view to, or for offer or sale in connection with, any distribution thereof. Buyer acknowledges that the Shares are Restricted Securities as that term is defined by Rule 144. Buyer understands:

(a) that the Shares are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Seller is relying upon the truth and accuracy of, and such Buyer’s compliance with, the representations, warranties, agreements, acknowledgments, and understandings of the Buyer as set forth herein in order to determine the availability of such exemptions and the eligibility of such Buyer to acquire the Shares; and,

(b) Buyer has received or has had full access to all the information Buyer considers necessary or appropriate to make an informed investment decision with respect to the Shares. Buyer further has had an opportunity to ask questions of and receive answers from the Seller's management regarding the Shares and to obtain additional information necessary to verify any information furnished to Buyer or to which Buyer had access. Further, the Buyer has reviewed Seller's business and the wisdom of investing in the Shares. Buyer has had the opportunity to review all of Seller’s audited financial statements and disclosures and risk factors that Seller has published concerning its operations as a company reporting to the Commission from time to time.

(c) Buyer understands and acknowledges that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Shares or the fairness or suitability of the investment in the Shares, nor have such authorities passed upon or endorsed the merits of the offering of the Shares, or the risks involved in this investment, including the speculative nature of the investment;

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(d) Buyer acknowledges that it is not acquiring the Shares as the result of any advertisement or solicitation, including any publicly issued or circulated newspaper, mail, radio, television, or other form of general advertising or solicitation in connection with the offer, sale and purchase from Seller regarding Buyer’s investment pursuant to this Agreement;

(e) Buyer is aware of the financial hazards involved in this investment, including but not limited to the risk of losing Buyer’s entire investment and the tax consequences of this investment. Buyer has consulted with Buyer’s own legal, accounting, tax, investment, and other advisers with respect to the status of Seller’s SEC filings, the Ancillary Documents, and the tax treatment of an investment by Buyer in the Shares and the merits and risks of an investment in the Shares.

(f) Buyer represents that Buyer is familiar with the requirements of Rule 144 of the Securities Act, as presently in effect, and understands the resale limitations imposed thereby. Buyer understands that Seller is not obligated to register any of the Shares. Buyer acknowledges that the certificates or book-entry for the Shares will bear a legend substantially in the form set forth below:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“ACT”), OR UNDER THE SECURITIES LAWS OF ANY OTHER JURISDICTION. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. PURCHASERS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

(g) Buyer Not Affiliated with Company. Buyer, either alone or with Buyer’s professional advisers (i) are unaffiliated with, have no equity interest in, and are not compensated by, the Seller or any affiliate or selling agent of Seller, directly or indirectly; (ii) has such knowledge and experience in financial and business matters that Buyer is capable of evaluating the merits and risks of an investment in the Shares; and (iii) can protect Buyer’s own interests in connection with its proposed investment in the Shares.

(h) Buyer is an “accredited investor” and “sophisticated investor” within the meaning of Rules 501 and 506(b) of Regulation D promulgated under the Securities Act.

(i) Without limiting the representations set forth above, Buyer further agrees not to make any disposition of all or any portion of the shares of the Shares, except in compliance with applicable securities laws.

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Section 4.04 Brokers. No broker, finder, or investment banker is entitled to any brokerage, finder, or other fee or commission in connection with the transactions contemplated by this Agreement or any Ancillary Document based upon arrangements made by or on behalf of Buyer.

Section 4.05 Sufficiency of Funds. Buyer has sufficient cash on hand or other sources of immediately available funds to enable it to make payment of the Purchase Price and consummate the transactions contemplated by this Agreement.

Section 4.06 Legal Proceedings. No Actions are pending or, to Buyer’s knowledge, threatened against or by Buyer or any Affiliate of Buyer that challenge or seek to prevent, enjoin, or otherwise delay the transactions contemplated by this Agreement. No event has occurred, or circumstances exist that may give rise to or serve as a basis for any such Action.

ARTICLE V

COVENANTS

Section 5.01 Compliance with Securities Laws. From the date hereof, and consistent with the terms and conditions in this Agreement and the Ancillary Documents, Seller shall file all reports, schedules, forms, statements, and other documents required to be filed by Seller under the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof.

Section 5.02 Further Assurances. Following the Closing, each of the parties hereto shall, as a material condition of this Agreement, execute and deliver such additional documents, instruments, conveyances, and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement.

Section 5.06 Governmental Approvals and Consents. Each party hereto shall, as promptly as possible, (i) make, or cause or be made, all filings and submissions required under any Law applicable to such party or any of its Affiliates; and (ii) use reasonable best efforts to obtain, or cause to be obtained, all consents, authorizations, orders and approvals from all Governmental Authorities that may be or become necessary for its execution and delivery of this Agreement and the performance of its obligations pursuant to this Agreement. Each party shall cooperate fully with the other party and its Affiliates in promptly seeking to obtain all such consents, authorizations, orders, and approvals. The parties hereto shall not willfully take any action that will delay, impair, or impede the receipt of any required consents, authorizations, orders, and approvals.

Section 5.07 Furnishing of Information. Seller covenants to file, consistent with the terms and conditions of this Agreement (or obtain extensions in respect thereof and file within the applicable grace period), all reports required to be filed by Seller pursuant to the Exchange Act.

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Section 5.08 Integration. Seller shall not sell, offer for sale, solicit offers to buy, or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Shares for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval before the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.

Section 5.09 Non-Public Information. Except for the material terms and conditions of the transactions contemplated by this Agreement, which may, if required by law, be disclosed in accordance with federal securities laws or when providing information requested by Buyer, Seller agrees that neither it nor anyone acting on its behalf will provide Buyer or its representatives with any material non-public information unless Buyer has first consented to receive such information and agreed to keep it confidential. If Seller delivers any material non-public information to Buyer, Buyer agrees not to trade based on such information and will comply with all applicable securities laws, including those prohibiting insider trading.

ARTICLE VI

CONDITIONS TO CLOSING

Section 6.01 Conditions to Obligations of All Parties. The obligations of each Party to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or before the Closing, of each of the following conditions:

(a) The Parties shall have duly performed and complied in all material respects with all agreements, covenants, and conditions required by this Agreement and the Ancillary Documents to be performed or complied with by it before or on the Closing Date.

(b) No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Governmental Order which is in effect and has the effect of making the transactions contemplated by this Agreement illegal, otherwise restraining or prohibiting consummation of such transactions or causing any of the transactions contemplated hereunder to be rescinded following completion thereof.

(c) No injunction or restraining order shall have been issued by any Governmental Authority, and be in effect, which restrains or prohibits any material transaction contemplated hereby.

Section 6.02 Conditions to Obligations of Seller.

(a) The representations and warranties of Buyer contained in this Agreement, and the Ancillary Documents and any certificate or other writing delivered pursuant hereto shall be true and correct in all respects on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such date.

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(b) Buyer shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement and the Ancillary Documents to be performed or complied with by it prior to or on the Closing Date.

(c) No Action shall have been commenced against Buyer, which would prevent the Closing. No injunction or restraining order shall have been issued by any Governmental Authority, and be in effect, which restrains or prohibits any transaction contemplated hereby.

Section 6.03 Conditions to Obligations of Buyer.

(a) The representations and warranties of Seller contained in this Agreement, and the Ancillary Documents and any certificate or other writing delivered pursuant hereto shall be true and correct in all respects (in the case of any representation or warranty qualified by materiality or Material Adverse Effect) or in all material respects (in the case of any representation or warranty not qualified by materiality or Material Adverse Effect) on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects).

(b) Seller shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by this Agreement and the Ancillary Documents to be performed or complied with by it prior to or on the Closing Date.

(c) No Action shall have been commenced against Buyer, Hollister & Blacksmith, Ellis Smith, or Seller which would prevent the Closing. No injunction or restraining order shall have been issued by any Governmental Authority and be in effect which restrains or prohibits any transaction contemplated hereby.

(e) All approvals, consents, and waivers contained in the Ancillary documents have been received, and executed counterparts shall have been delivered to Seller, Hollister & Blacksmith, Ellis Smith, and Buyer at or before the Closing.

(f) From the date of this Agreement, there shall not have occurred any Material Adverse Effect, nor shall any event or events have occurred that, individually or in the aggregate, with or without the lapse of time, could reasonably be expected to result in a Material Adverse Effect to the Company.

ARTICLE VII

INDEMNIFICATION

Section 7.01 Survival. Subject to the limitations and other provisions of this Agreement, the representations and warranties contained herein shall survive the Closing and shall remain in full force and effect until the date that is three years from the Closing Date.

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Section 7.02 Indemnification. Each Party (an “Indemnifying Party”) agrees to indemnify and hold harmless the other Party along with its officers, directors, employees, and authorized agents, and each Person or entity, if any, who controls such party within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (an “Indemnified Party”) from and against any Damages, joint or several, and any action in respect thereof to which the Indemnified Party becomes subject to, resulting from, arising out of or relating to:

(a) Any misrepresentation, breach of warranty, or nonfulfillment of or failure to perform any covenant or agreement on the part of the Indemnifying Party contained in this Agreement.

(b) Any untrue statement or alleged untrue statement of a material fact contained in any SEC filing or amendment thereto, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading.

(c) Any violation or alleged violation by Seller of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation under the Securities Act, the Exchange Act or any state securities law, as such Damages are incurred, except to the extent such Damages result primarily from the Indemnified Party’s failure to perform any covenant or agreement contained in this Agreement.

Section 7.04 Indemnification Procedures. The party making a claim under this Article VII is referred to as the “Indemnified Party,” and the party against whom such claims are asserted under this Article VII is referred to as the “Indemnifying Party.”

(a) Third Party Claims. If the Indemnified Party receives notice of a claim or lawsuit from a third party (not involved in this Agreement) that the Indemnifying Party must cover, the Indemnified Party must promptly notify the Indemnifying Party no later than ten days after receiving notice. Failing to provide timely notice will not cancel the Indemnifying Party’s obligations, except if the delay causes them to lose rights or defenses. The notice must include details of the claim, relevant documents, and, if possible, an estimate of the potential loss.

If the Indemnifying Party elects not to assume the defense of the Third-Party Claim, fails to notify the Indemnified Party of its intent to defend promptly, or does not diligently pursue the defense, the Indemnified Party shall have the right to undertake the defense, settlement, or compromise of such Third-Party Claim. In such an event, the Indemnifying Party shall be obligated to fully reimburse the Indemnified Party for all Losses incurred in connection with the defense, settlement, or compromise of the Third-Party Claim, including all attorney fees incurred by the Indemnified Party. Regardless, both parties shall reasonably cooperate in defense of the Third-Party Claim, including providing access to pertinent records, documents, and personnel necessary to prepare and defend such claim.

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(b) Settlement of Third Party Claims. Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not enter into a settlement of any Third-Party Claim without the prior written consent of the Indemnified Party. If a firm offer is made to settle a Third Party Claim without leading to liability or the creation of a financial or other obligation on the part of the Indemnified Party and provides, in customary form, for the unconditional release of each Indemnified Party from all liabilities and obligations in connection with such Third Party Claim and the Indemnifying Party desires to accept and agree to such offer, the Indemnifying Party shall give written notice to that effect to the Indemnified Party. If the Indemnified Party fails to consent to such firm offer within ten (10) days after its receipt of such notice, the Indemnified Party may continue to contest or defend such Third-Party Claim, and in such event, the maximum liability of the Indemnifying Party as to such Third-Party Claim shall not exceed the amount of such settlement offer. If the Indemnified Party fails to consent to such firm offer and also fails to assume the defense of such Third-Party Claim, the Indemnifying Party may settle the Third-Party Claim upon the terms outlined in such firm offer to settle such Third-Party Claim. If the Indemnified Party has assumed the defense, it shall not agree to any settlement without the written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed).

(c) Direct Claims. Any Action by an Indemnified Party on account of a Loss which does not result from a Third-Party Claim (a “Direct Claim”) shall be asserted by the Indemnified Party giving the Indemnifying Party reasonably prompt written notice thereof, but in any event not later than ten (10) days after the Indemnified Party becomes aware of such Direct Claim. The failure to give such prompt written notice shall not relieve the Indemnifying Party of its indemnification obligations, except and only to the extent that the Indemnifying Party forfeits rights or defenses because of such failure. Such notice by the Indemnified Party shall describe the Direct Claim in reasonable detail, include copies of all written evidence, and indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified Party. The Indemnifying Party shall have thirty (30) days after receiving such notice to respond in writing to such Direct Claim. The Indemnified Party shall allow the Indemnifying Party and its professional advisors to investigate the matter or circumstance alleged to give rise to the Direct Claim, and whether and to what extent any amount is payable in respect of the Direct Claim and the Indemnified Party shall assist the Indemnifying Party’s investigation by giving such information and assistance (including access to the Company’s premises and personnel and the right to examine and copy any accounts, documents or records) as the Indemnifying Party or any of its professional advisors may reasonably request. If the Indemnifying Party does not so respond within such thirty (30) day period, the Indemnifying Party shall be deemed to have rejected such claim, in which case the Indemnified Party shall be free to pursue such remedies as may be available to the Indemnified Party on the terms and subject to the provisions of this Agreement.

(d) Division of Liability. In the event that both the Indemnifying Party and the Indemnified Party share responsibility for a Third-Party Claim, the liability for any Losses arising from such claim shall be allocated between the Parties in proportion to their respective degrees of fault. If the Indemnified Party and the Indemnifying Party cannot agree on the allocation of liability, such allocation shall be determined by a court of competent jurisdiction pursuant to Section 9.10 below. Notwithstanding the foregoing, the Indemnifying Party shall remain obligated to indemnify the Indemnified Party for any portion of the Losses attributable to the Indemnifying Party’s actions or omissions, and the Indemnified Party shall be responsible for any portion of the Losses attributable to its own actions or omissions. Both parties shall cooperate in good faith to minimize Losses and ensure the efficient resolution of the claim.

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(e) Tax Claims. Seller shall remain responsible for all taxes, including income, sales, use, payroll, and other similar taxes, attributable to periods ending on or before December 31, 2023. However, any and all tax liabilities related to the tax year 2024 shall be assumed by Hollister & Blacksmith and Ellis Smith, pursuant to the terms of the Assignment and Assumption Agreement in Exhibit D. The parties agree that Hollister & Blacksmith and Ellis Smith shall indemnify and hold harmless the Seller from any and all claims, liabilities, or penalties arising from or relating to taxes for the year 2024. Seller shall have no further liability for taxes incurred for any period beginning on or after January 1, 2025, in accordance with Exhibit “D,” Assignment and Assumption Agreement and Release.

ARTICLE VIII

TERMINATION

Section 8.01 Termination. This Agreement may be terminated at any time prior to the Closing:

(a) by the mutual written consent of Seller and Buyer;

(b) without further obligations of any Party if this Agreement is not executed by October 31, 2024;

(i) there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant, or agreement made by Seller pursuant to this Agreement that would give rise to the failure of any of the conditions specified in this Agreement and such breach, inaccuracy or failure has not been cured by Seller within ten (10) days of Seller’s receipt of written notice of such breach from Buyer.

(d) by Sellers by written notice to Buyer if:

(i) there has been a breach, inaccuracy in, or failure to perform any representation, warranty, covenant or agreement made by Buyer pursuant to this Agreement that would give rise to the failure of any of the conditions specified in Article VI and such breach, inaccuracy or failure has not been cured by Buyer within ten days of Buyer’s receipt of written notice of such breach from Seller; or,

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(ii) any of the conditions set forth in Article VI shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled, unless such failure shall be due to the failure of Sellers to perform or comply with any of the covenants, agreements or conditions hereof to be performed or complied with by it before the Closing; or

(e) by Buyer or Seller in the event that (i) there shall be any Law that makes consummation of the transactions contemplated by this Agreement illegal or otherwise prohibited or (ii) any Governmental Authority shall have issued a Governmental Order restraining or enjoining the transactions contemplated by this Agreement, and such Governmental Order shall have become final and non-appealable.

Section 8.02 Effect of Termination. In the event of the termination of this Agreement in accordance with this Article, this Agreement shall forthwith become void and there shall be no liability on the part of any party.

ARTICLE IX

MISCELLANEOUS

Section 9.01 Expenses. Except as otherwise expressly provided herein, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses, whether or not the Closing shall have occurred.

Section 9.02 Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient or (d) on the third (3^rd) day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 9.02):

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If to Seller: American Cannabis Company, Inc. :

	Attention: Mr. Ellis Smith
	1004 South Tejon Street
	Colorado Springs, CO 80903
	E-mail: smith@americancannabisconsulting.com

If to Buyer: TEC, LLC :

	Attention: Mr. Joseph Cleghorn
	701 Waddell Avenue
	Key West, FL 33040
	E-mail: jckeys1@icloud.com

If to Third Party Beneficiary: Saunders Entities :

	Attention: Mr. Roger Scott Saunders
	16208 16th Ave SW
	Burien, WA 98166
	E-mail: rssriparian@gmail.com

Section 9.03 Interpretation. For purposes of this Agreement, (a) the words “include,” “includes,” and “including” shall be deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; and (c) the words “herein,” “hereof,” “hereby,” “hereto” and “hereunder” refer to this Agreement as a whole. This Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.

Section 9.04 Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

Section 9.05 Severability. If any term or provision of this Agreement is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal, or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement to effect the original intent of the parties as closely as possible in a mutually acceptable manner so that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

Section 9.06 Entire Agreement. This Agreement and the Ancillary Documents constitute the sole and entire agreement of the Parties to this Agreement with respect to the subject matter contained herein and therein and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and those in the Ancillary Documents, the Exhibits, and Disclosure Schedules, the statements in the body of this Agreement will control.

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Section 9.07 Successors and Assigns. This Agreement, including the Ancillary Documents and Exhibits, shall be binding upon and shall inure to the benefit of the Parties hereto and their respective successors and permitted assigns. Neither Party may assign its rights or obligations hereunder without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed. No assignment shall relieve the assigning Party of any of its obligations hereunder.

Section 9.08 No Third-party Beneficiaries. Excepting the Saunders Entities, this Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns, and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or because of this Agreement.

Section 9.09 Amendment and Modification; Waiver. This Agreement may only be amended, modified, or supplemented by an agreement in writing signed by each Party hereto. No waiver by any Party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the Party so waiving. No waiver by any Party shall operate or be construed as a waiver in respect of any failure, breach, or default not expressly identified by such written waiver, whether of a similar or different character and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power, or privilege arising from this Agreement shall operate or be construed as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

Section 9.10 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

(a) This Agreement shall be governed by and construed in accordance with the internal laws of the State of Colorado without giving effect to any choice or conflict of law provision or rule (whether of the State of Colorado or any other jurisdiction).

(b) ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE ANCILLARY DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF COLORADO IN EACH CASE LOCATED IN THE CITY OF DENVER AND COUNTY OF DENVER, AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY’S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

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(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE ANCILLARY DOCUMENTS IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE ANCILLARY DOCUMENTS] OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.10(c). IN THE EVENT OF ANY SUCH SUIT, LEGAL ACTION, OR ARBITRATION, THE PARTY OR PARTIES IN FAVOR OF WHOM THE JUDGE OR ARBITRATOR RULES SHALL BE IMMEDIATELY REIMBURSED FOR ALL OF ITS COSTS AND REASONABLE LEGAL FEES BY THE OTHER PARTY.

Section 9.11 Specific Performance. The Parties agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the Parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy to which they are entitled at law or in equity.

Section 9.12 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall be deemed the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

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AMERICAN CANNABIS COMPANY, INC.

	Name:	Ellis Smith

	Principal Executive Officer

TEC, LLC

	Name:	Joseph Cleghorn

	Title:	Managing Member

ACKNOWLEDGED AND AGREED by Third-Party Beneficiary: ROGER SCOTT SAUNDERS, on behalf of Medihemp, LLC, SLAM Enterprises, LLC, and Medical Cannabis Caregivers, Inc. (Collectively, the “Saunders Entities”)

	Name:	Roger Scott Saunders

	Title:	Manager, Director, Authorized Signer

APPROVED AS TO FORM:

LAW OFFICES OF CLIFTON BLACK, PC

By
Name:	Clifton Black
Title:	Counsel for Saunders Entities

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	ELLIS SMITH, Individually

	By

	Name:	Ellis Smith

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Exhibit 10.2

Escrow Agreement

This Escrow Agreement, dated as of November 1, 2024 (this “Agreement”), is by and among the following:

●

American Cannabis Company, Inc., a Delaware corporation (“Company”);

●

Ellis Smith, an Individual (“Smith”);

●

TEC, LLC, a Delaware limited liability company (“TEC”);

●

Medihemp, LLC (“Medihemp”) and its wholly owned subsidiaries, SLAM Enterprises, LLC (“SLAM”) and Medical Cannabis Caregivers, Inc. (“Medical Cannabis”) (collectively, the “Saunders Entities”);

●

Roger Scott Saunders, an individual (“Saunders”); and,

●

Mailander Law Office, Inc., a California corporation (“Escrow Agent”)

The Company, Smith, TEC, Saunders Entities, and Saunders may collectively be called the “Parties.”

RECITALS

WHEREAS, the Company and TEC entered into a stock purchase agreement on November 1, 2024, and an executed copy is attached to this Agreement.

WHEREAS, pursuant to the terms and conditions of the stock purchase agreement, the Company agreed to sell to TEC, and TEC agreed to purchase from the Company three hundred and two million, nine hundred thousand, four hundred and fifty-eight (302,900,458) Shares of the Company’s common stock in exchange for a purchase price of Three Hundred and Ten Thousand Dollars ($310,000) (a price of $0.001023 per share) (“Purchase Price”).

WHEREAS, pursuant to the terms and conditions of the stock purchase agreement, the purchase price was agreed to be deposited into the Escrow Agent’s IOLTA trust account for disbursement consistent with the instructions and authorization of the Parties in the stock purchase agreement;

WHEREAS, the Parties desire to appoint the Escrow Agent as the neutral third party to facilitate the payments of the Purchase Price outlined in the stock purchase agreement, and the Escrow Agent has agreed to accept, safeguard, and disburse the funds deposited into its IOLTA Escrow Account strictly in accordance with the provisions set forth in this Agreement;

WHEREAS, the Parties acknowledge that any interest earned on the Purchase Price deposited in the IOLTA Escrow Account (“Escrow Account”) shall be directed to the California State Bar administering the IOLTA program in accordance with IOLTA rules and regulations and shall not be credited to the account of any of the Parties;

WHEREAS, capitalized terms used herein but not otherwise defined have the meanings ascribed to such terms in the stock purchase agreement;

WHEREAS, the above recitals are statements of fact made solely by the Parties and are not attributable to the Escrow Agent.

WHEREAS, the Escrow Agent’s obligations are limited to those expressly provided in the agreement.

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AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, hereby agree as follows:

Appointment of Escrow Agent. The Parties hereby appoint the Escrow Agent to act as the escrow agent hereunder, to hold in escrow the Purchase Price and to direct the disposition thereof in accordance with the terms and conditions of the stock purchase agreement, and the Escrow Agent hereby accepts such appointment.

Escrow Deposit – INITIAL DEPOSIT. Pursuant to Section 2.02 of the stock purchase agreement, within three business days after the execution of the stock purchase agreement, TEC shall deposit twenty-five thousand dollars ($25,000) (the "Initial Deposit") into the Escrow Account. This deposit is agreed to be non-refundable, and the Parties authorize the Escrow Agent to disburse from the Initial Deposit the following sums:

(a)

Hudgens CPA PLLC: Eighteen Thousand Dollars ($18,000). This sum represents the current balance due Hudgens of (1) six thousand dollars ($6,000) for the March 31, 2024, 10-Q SEC filing; (2) six thousand dollars ($6,000) for the June 30, 2024, 10-Q SEC filing; and, (3) six thousand dollars ($6,000) for the September 30, 2024, 10-Q SEC filing.

(b)

SEC Filing Solutions LLC: Two Thousand Dollars ($2,000).

(c)

H-Squared Performance Financial: Five Thousand Dollars ($5,000).

Escrow Deposit – SECOND DEPOSIT. Within three business days after Seller completes the filing of its Form 10-Q Quarterly reports for the periods ending June 30, 2024, and September 30, 2024, Buyer shall deposit with the Escrow Agent the sum of one hundred and fifty thousand dollars ($150,000) ("Second Deposit"). The Second Deposit shall be non-refundable, and the Seller shall instruct and authorize the Escrow Agent to disburse from the Second Deposit fees due to Hudgens CPA PLLC for the annual audit, outstanding legal fees to the Seller's counsel for legal services rendered to date, escrow fees, and payments to H Squared Performance Financial and SEC Filing Solutions to ensure that the Seller's annual report on Form 10-K is filed timely and within the guidelines outlined in the Exchange Act. Additionally, from the outstanding balance left from the Second Deposit, the Escrow Agent is directed to (i) provide an accounting to the Parties, (ii) engage Glendale Securities or other FINRA registered broker-dealer to file a 15c2-11 application on behalf of Seller to FINRA, and to reimburse costs for legal and accounting for the 15c2-11 submission. The Parties acknowledge that, as of the date of the stock purchase agreement and this Escrow Agreement, the exact costs attributable to the 15c2-11 application are unknown.

Escrow Deposit – FINAL PAYMENT OF BALANCE OF PURCHASE PRICE. After the Company files the Form 10-K for the year ended December 31, 2024, consistent with the Exchange Act, and the Company completes its SEC Rule 15c2-11 application, TEC shall tender the balance of the Purchase Price by wire transfer of immediately available funds in the remaining balance to the Escrow Account (“Final Payment”). The Escrow Agent shall, consistent with the terms and conditions of the Escrow Agreement, disburse the Final Payment to the Saunders Entities in the amount of at least $135,000.00.

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All deposits to the Escrow Account shall be by wire transfer of immediately available funds to or to the order of the Escrow Agent in its capacity as escrow agent hereunder (Escrow Wiring Instructions attached hereto). Upon delivery of the Purchase Price by TEC to the Escrow Agent, the Escrow Agent shall acknowledge receipt of the Initial Deposit, Second Deposit, and Final Payment to the Parties and provide an accounting.

(a)

The Parties expressly acknowledge and agree that any interest earned on the Escrow Funds as a result of being held in the Escrow Account is the property of the State of California, in accordance with state regulations, and that no Party shall have any claim to such interest. The Escrow Agent shall disburse the Escrow Funds in accordance with the terms of this Agreement and the stock purchase agreement only to the extent that monies have been deposited with it and have cleared.

Release of Escrow Funds. The Escrow Funds shall only be distributed and released in accordance with Sections 2, 3, and 4 of this Agreement.

Escrow Release Date. Promptly after deposit and clearance of the Final Payment into the Escrow Account, and the confirmation that beneficial ownership of common stock consideration has been transferred to TEC (the "Escrow Release Date"), but in any case within ten (10) Business Days of such date, the Escrow Agent shall deliver the Final Payment in the Escrow Account according to Section 4 above, less any outstanding legal, accounting and FINRA fees, related to the 15c2-11 application to the Company by wire transfer of immediately available funds.

Indemnification. With respect to claims for indemnification:

(a)

At any time and from time to time on or before the "Escrow Release Date,” if any Party makes a claim for indemnity pursuant to and in accordance with the stock purchase agreement (a "Claim"), the Party shall deliver to the Escrow Agent and Company written notice (a "Dispute Notice") setting forth in reasonable detail the amount, nature, and basis of the Claim by the claiming Party. If the Escrow Agent has not received a written objection to such Claim or portion thereof from the Company within ten (10) days following the Escrow Agent's and Company’s receipt of such Escrow Notice, then the Escrow Agent shall not distribute any portion of the Escrow Amount that is the subject of the Dispute Notice until the Escrow Agent receives either (i) joint written instructions signed by the Parties authorizing the release of the Escrow Amount that is agreed upon as the amount recoverable in respect of the Dispute Notice or (ii) a final and non-appealable order of any court of competent jurisdiction directing the release to the Company of the Escrow Amount that is determined to be the amount recoverable in respect of the Dispute Notice. Notwithstanding any other provision in this Agreement to the contrary, the Escrow Agent shall disburse the Escrow Amount in accordance with a notice from the Parties of a final and non-appealable order from a court of competent jurisdiction, along with a copy of the order, pursuant to which such court has determined whether and to what extent the Parties are entitled to the Escrow Amount.

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(b)

Adjustment to the Purchase Price. Except to the extent, if any, otherwise provided in any Joint Instruction, all distributions of the Escrow Funds under a resolved Dispute Notice pursuant to this Agreement shall be deemed adjustments to the Purchase Price pursuant to the terms of the stock purchase agreement.

(c)

Final and Non-appealable Order. Notwithstanding any other provision in this Agreement, the Escrow Agent shall disburse the Escrow Funds (or any portion thereof) in accordance with a notice from either the Company or TEC of a final and non-appealable order from a court of competent jurisdiction, along with a copy of the order, pursuant to which such court has determined whether and to what extent the Company or TEC are entitled to distribution of the Escrow Funds (or any portion thereof).

Inspection Rights and Account Statements. The Parties shall have the right to inspect and obtain copies of the records of the Escrow Agent pertaining to this Agreement and to receive periodic reports of the status of the Escrow Account. On or before the fifteenth (15^th) Business Day following the end of each month during the term of this Agreement, the Escrow Agent shall deliver an account statement to the Parties with respect to the Escrow Account for the prior month, which statement shall include the account balances, disbursements made and the status of any Unresolved Claims.

10.

Termination. Upon disbursement in full of the Final Payment in accordance with this Agreement, this Agreement shall terminate, and all rights, responsibilities, and other obligations of the Escrow Agent shall be deemed to have been satisfied; provided, however, the provisions of this Section 10, and Sections 11 through 29 shall survive the termination of this Agreement.

11.

Conditions to Escrow; Liability of the Escrow Agent. The Escrow Agent agrees to hold the Escrow Funds in the Escrow Account and to perform its duties hereunder in accordance with the terms and provisions of this Agreement. The Parties agree that the Escrow Agent does not assume any responsibility for the failure of the Company or TEC to perform in accordance with the stock purchase agreement or this Agreement. The acceptance by the Escrow Agent of its responsibilities hereunder is subject to the following terms and conditions, which the Parties hereto agree shall govern and control with respect to the Escrow Agent's rights, duties, liabilities, and immunities:

(a)

The Escrow Agent shall have only those duties specifically provided herein, which shall be deemed purely ministerial, and the Escrow Agent shall under no circumstances be deemed a fiduciary for any of the other Parties to this Agreement. The Escrow Agent shall have no implied duties or obligations and shall not be charged with knowledge or notice of any fact not specifically set forth herein. The Escrow Agent shall not be required to take any action hereunder requiring any expense to be incurred by the Escrow Agent unless the payment of such expense is made or provided for in a manner reasonably satisfactory to it or to take any legal action or commence any proceeding in connection with the Escrow Funds, any account into which the Escrow Funds are deposited, this Agreement or the stock purchase agreement, or to appear in, prosecute or defend any such legal action or proceeding.

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(b)

The Escrow Agent shall be protected in acting upon any written notice, consent, receipt, or other paper or document furnished to it as to its due execution validity and effectiveness of its provisions and as to the truth and accuracy of any information therein contained, which the Escrow Agent in good faith believes to be genuine and what it purports to be. Should it be necessary for the Escrow Agent to act upon any instructions, directions, documents, or instruments issued or signed by or on behalf of any corporation, fiduciary, or individual acting on behalf of another Party hereto, which the Escrow Agent in good faith believes to be genuine, it shall not be necessary for the Escrow Agent to inquire into such corporation's, fiduciary's, or individual's authority.

(c)

The Escrow Agent shall not be liable for any error of judgment or any act done or step taken or omitted by it in good faith or for anything it may do or refrain from doing in connection herewith, except in the case of its gross negligence or willful misconduct. In no event shall the Escrow Agent be liable for incidental, indirect, special, consequential, or punitive damages (including, but not limited to, lost profits) even if the Escrow Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.

(d)

The Escrow Agent may consult with and obtain advice from legal counsel in the event of any question as to any of the provisions hereof or its duties hereunder. It shall incur no liability and shall be fully protected in acting in good faith in accordance with the opinion and instructions of such counsel. The reasonable and documented costs of such counsel's services shall be paid to the Escrow Agent in accordance with Section 15 below.

(e)

In the event that the Escrow Agent shall be uncertain as to its duties or rights hereunder or shall receive claims or demands from any Party which, in its opinion, conflict with any instructions of the provisions of this Agreement, it shall be entitled to refrain from taking any action until it shall be directed otherwise in writing jointly by the Parties or by a final and non-appealable order of a court of competent jurisdiction. The Escrow Agent shall have the option, after ten (10) Business Days' notice to the Parties of its intention to do so, to file an action in interpleader requiring the Parties to answer and litigate any claims and rights among themselves.

(f)

In its sole discretion, the Escrow Agent is authorized to comply with any writ, order, judgment, or decree issued or process entered by any court with respect to the Purchase Price without a determination by the Escrow Agent of such court's jurisdiction in the matter. In the event that the Escrow Agent is served with any writ, order, judgment, or decree which counsel to the Escrow Agent advises is binding upon the Escrow Agent, the Escrow Agent shall have the authority to rely upon and comply with any such writ, order, judgment or decree without the need for an appeal or further action. If the Escrow Agent complies with any such writ, order, judgment or decree, it shall not be liable to any of the other Parties hereto or to any other person or entity because of such compliance even though such writ, order, judgment, or decree may be subsequently reversed, modified, annulled, set aside or vacated.

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(g)

Any corporation or association into which the Escrow Agent may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer its escrow business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which it is a party, shall be and become the successor escrow agent hereunder and vested with all of the title to the whole property or trust estate and all of the trusts, powers, immunities, privileges, protections and all other matters as was its predecessor, without the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

12.

Resignation or Removal of Escrow Agent.

(a)

The Escrow Agent reserves the right to resign at any time by giving five (5) Business Days' written notice of resignation to the Parties, specifying the effective date of such resignation. On the effective date of such resignation, the Escrow Agent shall deliver this Agreement together with the Escrow Funds and any and all related instruments or documents to any successor escrow agent agreeable to the Parties. If a successor escrow agent has not been appointed or has not accepted such appointment prior to the expiration of a period of ten (10) Business Days following the date of the notice of such resignation, the Escrow Agent may, but shall not be obligated to, apply to a court of competent jurisdiction for the appointment of a successor escrow agent. Any such resulting appointment shall be binding upon all of the Parties to this Agreement. Notwithstanding the foregoing, the Escrow Agent or any successor escrow agent shall continue to act as Escrow Agent until a successor is appointed and qualified to act as the Escrow Agent hereunder.

(b)

The Escrow Agent may be removed (with or without cause), and a new escrow agent may be appointed upon the Parties' mutual agreement. In such event, the Parties shall deliver a joint written notice to the Escrow Agent of such removal, together with joint written instructions authorizing delivery of this Agreement together with the Escrow Funds and any and all related instruments or documents to a successor escrow agent.

(c)

Upon delivery of the Escrow Funds to a successor escrow agent in accordance with this Section 12, the Escrow Agent shall thereafter be discharged from any further obligations hereunder. All power, authority, duties, and obligations of the Escrow Agent shall apply to any successor escrow agent.

13.

Indemnification of Escrow Agent. The Parties shall, jointly and severally, indemnify and hold the Escrow Agent harmless from and against any liability, loss, damage or expense, as well as the costs and expenses, including reasonable attorneys' fees and disbursements, of defending against any claim or liability arising under this Agreement (an "Indemnified Expense"), that the Escrow Agent may incur in connection with this Agreement and its performance hereunder or in connection herewith, except to the extent such liability, loss, damage or expense arises from its gross negligence or willful misconduct. The indemnification provided for under this Section 13 shall be allocated and paid in the same manner as fees and expenses under Section 15 below and shall survive the resignation or removal of the Escrow Agent; provided, however, that if the Indemnified Expense is incurred because of the fault of either the Purchaser or the Seller, then, as between the Purchaser and the Seller, the Party at fault shall be responsible for the cost and shall indemnify the other Party for any loss, cost or expense (including reasonable attorneys' fees, costs and disbursements) incurred as a result.

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14.

Representations. Each Party represents and warrants to each of the other Parties that: (i) such Party is duly formed or organized, validly existing and in good standing under the laws of its jurisdiction of formation or organization; (ii) such Party has the requisite capacity and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby; and (iv) this Agreement has been duly authorized, executed and delivered by such Party, does not conflict with any other agreement by which such Party or its assets are bound, and assuming that this Agreement constitutes a legal, valid and binding obligation of each of the other Parties, this Agreement constitutes the legal, valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization or similar laws affecting the rights of creditors generally and the availability of equitable remedies (regardless of whether such enforceability is considered in a proceeding in equity or at law).

15.

Fees and Costs. The Escrow Agent agrees to serve as escrow agent in accordance with the fee schedule attached as Exhibit F hereto. The Company shall pay all of the fees and expenses (including reasonable and documented attorneys' fees) of the Escrow Agent for the services to be rendered by the Escrow Agent pursuant to this Agreement.

16.

Business Days. If any date on which the Escrow Agent is required to make a delivery pursuant to the provisions hereof is not a Business Day, then the Escrow Agent shall make such investment or delivery on the next succeeding Business Day.

17.

Notices. Any notice, demand, consent or other communication required or permitted to be given under this Agreement shall be in writing and be given (and deemed to have been duly given upon delivery or receipt):

(a)

by delivery by hand;

(b)

by prepaid overnight courier service (with written proof of delivery);

(c)

by certified or registered mail (with written or electronic proof of delivery), postage prepaid, and return receipt requested;

(d)

by facsimile (with written telephonic confirmation of delivery); or

(e)

by email or electronic delivery of Adobe portable document format files ("PDF Files") (with electronic proof of delivery);

in each case, addressed as follows:

If to Company:

American Cannabis Company, Inc.
Attention: Mr. Ellis Smith
1004 South Tejon Street
Colorado Springs, CO 80
E-mail: smith@americancannabisconsulting.com

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If to TEC:

TEC, LLC
Attention: Mr. Joseph Cleghorn
701 Waddell Avenue
Key West, FL 33040
E-mail: jckeys1@icloud.com

If to Smith:

Ellis Smith
1004 South Tejon Street
Colorado Springs, CO 80903
Email: smith@americancannabisconsulting.com

If to the Saunders Entities and Saunders:

Roger Scott Saunders
16208 16th Ave SW
Burien, WA 98166
E-mail: rssriparian@gmail.com

with a copy (which shall not constitute notice) to:

Law Offices of Clifton Black PC c/o Clifton Black
2 N. Cascade, 11th Floor
Colorado Springs, CO 80903
Email: Cliff@Cliftonblacklaw.com

If to the Escrow Agent:

Mailander Law Office, Inc.
2721 SW Trenton St # 47135
Seattle WA 98146
Email: tad@mailanderlaw.net

or to such other address, facsimile number, or email address for a Party as shall be specified in a notice given by such Party to each other Party in accordance with this Section 17. Nothing in this Section 17 shall be deemed to constitute consent to the manner or address for service of process in connection with any legal or administrative arising out of or in connection with this Agreement.

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18.

Construction of Agreement. The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Party. Except where expressly stated otherwise in this Agreement, the following rules of interpretation apply: (a) "either" and "or" are not exclusive, and "include," "includes" and "including" are not limiting and shall be deemed to be followed by the words ", but not limited to, or ", without limitation,"; (b) "hereof," "hereto," "hereby," "herein" and "hereunder" and words of similar import refer to this Agreement as a whole, and not to any particular provision; (c) "date hereof" refers to the date set forth in the initial caption of this Agreement; (d) "extent" in the phrase "to the extent" means the degree to which a subject or other thing extends, and such phrase does not mean simply "if;" (e) definitions are applicable to the singular as well as the plural forms of such terms; (f) pronouns shall include the corresponding masculine, feminine or neuter forms; (g) references to a Person are also to such Person's permitted successors and assigns; and (h) references "Article" or "Section" refer to an Article or Section of this Agreement; and Article, Section and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define, or limit the scope, extent or intent of this Agreement or any provision hereof. No summary of this Agreement prepared by any Party shall affect the meaning or interpretation of this Agreement. This Agreement is the product of negotiation by the Parties having the assistance of counsel and other advisers. If an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement. Accordingly, neither this Agreement nor any provision hereof shall be construed more strictly against one Party than against any other merely because it may have been prepared by one of the Parties or counsel for one of the Parties.

19.

Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall constitute one agreement. Photocopies, facsimile, email or other electronic transmissions of PDF files of executed documents and signatures shall be deemed original documents and signatures and shall be fully binding on the Parties to the same extent as original documents with original signatures.

20.

Entire Agreement. This Agreement and, to the extent referred to herein or applicable hereto, the Purchase Agreement, together with the other agreements, documents and instruments referred to herein or therein or attached hereto or thereto, embody the complete agreement and understanding among the Parties with respect to the subject matter hereof and supersede and preempt any prior understandings, agreements or representations by or among the Parties, written and oral, that may have related to the subject matter hereof in any way.

21.

Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable to contracts to be made and performed entirely therein without giving effect to the principles of conflicts of law thereof or of the laws of any other jurisdiction.

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22.

Jurisdiction; Venue.

(a)

Each Party hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the state and Federal courts of the State of California in any action or proceeding arising out of or relating to this Agreement or the other agreements, documents or instruments delivered in connection with, arising out of, or, relating or incidental to, the negotiation, documentation administration, performance or consummation of the transactions contemplated hereby, or for recognition or enforcement of any judgment relating thereto; and each Party hereby irrevocably and unconditionally (i) agrees not to commence any such action or proceeding except in such courts, (ii) agrees that any claim in respect of any such action or proceeding may be heard and determined in such California state court or, if no such state court has proper jurisdiction, in such Federal court, (iii) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such action or proceeding in any such California state or Federal court, and (iv) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such California state or Federal court.

(b)

Each Party agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

(c)

Each Party irrevocably consents to the service of process outside the territorial jurisdiction of the courts referred to in this Section 22 in any such action or proceeding by mailing copies thereof by registered United States mail, postage prepaid, return receipt requested, to its address as specified in or pursuant to Section 16. However, the foregoing shall not limit the right of a Party to effect service of process on the other Party by any other legally available method.

23.

Waiver of Jury Trial. EACH PARTY DOES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY IRREVOCABLY WAIVE ANY AND ALL OF SUCH PARTY'S RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR RELATING OR INCIDENTAL HERETO, INCLUDING, BUT NOT LIMITED TO, THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.

24.

Remedies. The Parties agree that (a) irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms hereof or were otherwise breached, and (b) each Party will be entitled to specific performance of the terms hereof in addition to any other remedy to which such Party is entitled at law or in equity without the posting of any bond. For the avoidance of doubt, any Party may contemporaneously commence an action for specific performance or injunctive or other equitable relief and seek any other form of remedy at law or in equity that may be available for breach under this Agreement or otherwise in connection with this Agreement or the transactions contemplated hereby (including monetary damages).

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25.

Cumulative Rights. Each right, power, and remedy of each of the Parties now or hereafter existing at law or in equity shall be cumulative and concurrent and shall be in addition to every other right, power, and remedy provided for in this Agreement and the exercise of any right, power or remedy shall not preclude the simultaneous or later exercise of any other right or remedy.

26.

Amendment; Waiver. The rights and obligations of the Parties under this Agreement may be waived (either generally or in a particular instance, either retroactively or prospectively, and either for a specified period or indefinitely) or amended if and only if such waiver or amendment is consented to in writing by each of the Parties hereto. Any waiver shall be limited to the circumstance or event specifically referenced in the written waiver document and shall not be deemed a waiver of any other term of this Agreement or of the same circumstance or event upon any recurrence thereof. The failure to enforce any provision of this Agreement shall not be deemed a waiver of such provision.

27.

Severability. Each provision of this Agreement is intended to be severable. If any term or provision hereof is held by a court of law to violate any applicable local, state or federal ordinance, statute, law, administrative or judicial decision, public policy or for any other reason, and if such court should declare such provision of this Agreement to be illegal, invalid, unlawful, void, voidable, or unenforceable as written, then such provision shall be given full force and effect to the fullest extent that is legal, valid and enforceable, the remainder of this Agreement shall be construed as if such illegal, invalid, unlawful, void, voidable or unenforceable provision was not contained herein, and the rights, obligations and interests of the Parties under the remainder of this Agreement shall continue in full force and effect. If any provision is held to be unenforceable, the court making such determination shall have the power to, and shall, modify such provision to the minimum extent necessary to make such provision, as so modified, enforceable, and such provision shall then be applicable in such modified form. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the Parties agree that the court making such determination shall have the power to limit the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified. In the event that such court does not exercise the power granted to it in the prior sentence, the Parties agree to replace such invalid or unenforceable term or provision with a valid and enforceable term or provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable term.

28.

Successors and Assigns. Except as provided in Section 11(g), neither this Agreement nor any of the rights or obligations of any Party under this Agreement shall be assigned, in whole or in part (by operation of law or otherwise), by any Party without the prior written consent of the other Parties. Subject to the foregoing, this Agreement shall bind and inure to the benefit of and be enforceable by the Parties and their respective successors and permitted assigns.

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29.

Third Party Beneficiaries. Other than with respect to the Saunders Entities and Saunders, nothing in this Agreement, express or implied, is intended to confer on any other person or entity other than the Parties or their respective successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement.

[Signature page follows]

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the day and year first above written.

AMERICAN CANNABIS COMPANY, INC.

By:
Name:	Ellis Smith
Title:	CEO, CFO

TEC, LLC

By:
Name:	Joseph Cleghorn
Title:	Manager

SAUNDERS ENTITIES

By:
Name:	Scott Saunders
Title:	Manager, Director

ROGER SCOTT SAUNDERS (“SAUNDERS”)

By:
Name:	Roger Scott Saunders
Title:	As an Individual

ELLIS SMITH (“SMITH”)

By:
Name:	Ellis Smith
Title:	As an Individual

The undersigned hereby accepts the terms and provisions of the foregoing Escrow Agreement and agrees to receive, hold, deal with, and dispose of any property comprising the Escrow Funds in accordance with the foregoing Escrow Agreement.

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MAILANDER LAW OFFICE, INC.

as Escrow Agent

By:
Name:	Tad Mailander
Title:	President

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Exhibit A. Designated Persons.

Ellis Smith, Individually and for the Company

Joseph Cleghorn for TEC

Clifton Black, Esq. for Saunders and the Saunders Entities

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Exhibit B. Claim Notice.

Pursuant to Section the Escrow Agreement, dated as of October 22, 2024 (the "Escrow Agreement"), by and among Hollister & Blacksmith, Inc., a Colorado corporation (“Hollister & Blacksmith”) doing business as American Cannabis Company, Inc., a Delaware corporation (“Company”); Ellis Smith, an Individual (“Smith”); TEC, LLC, a Florida limited liability company (“TEC”); Medihemp, LLC (“Medihemp”) and its wholly owned subsidiaries, SLAM Enterprises, LLC (“SLAM”) and Medical Cannabis Caregivers, Inc. (“Medical Cannabis”) (collectively, the “Saunders Entities”); Roger Scott Saunders an individual (“Saunders”); and, Mailander Law Office, Inc., a California corporation (“Escrow Agent”) __________ hereby certifies to the Escrow Agent that __________ has a good faith claim under the stock purchase agreement, dated as of October 9, 2024, as follows:

[specify in reasonable detail the amount and nature of the claim]

The Escrow Agent is hereby instructed, subject to the provisions of the Escrow Agreement, to disburse the amount indicated above as follows:

[appropriate information].

All terms beginning with initial capital letters not otherwise defined in this certification have the same meaning as set forth in the Escrow Agreement.

Dated: [date].

CLAIMANT PARTY

By:
Name:
Title:

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Exhibit C. Dispute Notice.

Pursuant to Section 8 of the Escrow Agreement, dated as of October 22, 2024 (the "Escrow Agreement"), by and among Hollister & Blacksmith, Inc., a Colorado corporation (“Hollister & Blacksmith”) doing business as American Cannabis Company, Inc., a Delaware corporation (“Company”); Ellis Smith, an Individual (“Smith”); TEC, LLC, a Florida limited liability company (“TEC”); Medihemp, LLC (“Medihemp”) and its wholly owned subsidiaries, SLAM Enterprises, LLC (“SLAM”) and Medical Cannabis Caregivers, Inc. (“Medical Cannabis”) (collectively, the “Saunders Entities”); Roger Scott Saunders an individual (“Saunders”); and, Mailander Law Office, Inc., a California corporation (“Escrow Agent”) __________ hereby objects to __________ certification dated [____________________] (the "Claim Notice"): [specify basis for objection]. The Escrow Agent is hereby instructed not to disburse to Purchaser $[_____] of the amount requested in the Claim Notice, except in accordance with the provisions of Section 8 of the Escrow Agreement.

All terms beginning with initial capital letters not otherwise defined in this certification have the same meaning as set forth in the Escrow Agreement.

Dated: [date].

PARTY

By:
Name:
Title:

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Exhibit D. Dispute Resolution Joint Instruction.

Pursuant to Section 8(a) of the Escrow Agreement, dated as of October 22, 2024 (the "Escrow Agreement"), by and among Hollister & Blacksmith, Inc., a Colorado corporation (“Hollister & Blacksmith”) doing business as American Cannabis Company, Inc., a Delaware corporation (“Company”); Ellis Smith, an Individual (“Smith”); TEC, LLC, a Florida limited liability company (“TEC”); Medihemp, LLC (“Medihemp”) and its wholly owned subsidiaries, SLAM Enterprises, LLC (“SLAM”) and Medical Cannabis Caregivers, Inc. (“Medical Cannabis”) (collectively, the “Saunders Entities”); Roger Scott Saunders an individual (“Saunders”); and, Mailander Law Office, Inc., a California corporation (“Escrow Agent”)Seller and Purchaser hereby certify to the Escrow Agent that the disputed amount outlined in Seller's Dispute Notice, dated [____________________], is to be disbursed as follows:

$[_____] to __________; and

$[_____] to __________.

The Escrow Agent is hereby instructed to disburse such funds from the Escrow Account.

All terms beginning with initial capital letters not otherwise defined in this certification have the same meaning as set forth in the Escrow Agreement.

Dated: [date]

HOLLISTER & BLACKSMITH, INC., dba AMERICAN CANNABIS COMPANY, INC.

By:
Name:	Ellis Smith
Title:	CEO, CFO

TEC, LLC

By:
Name:	Joseph Cleghorn
Title:	Manager

SAUNDERS ENTITIES

By:
Name:	Scott Saunders
Title:	Manager, Director

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ROGER SCOTT SAUNDERS (“SAUNDERS”)

By:
Name:	Roger Scott Saunders
Title:	As an Individual

ELLIS SMITH (“SMITH”)

By:
Name:	Ellis Smith
Title:	As an Individual

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Exhibit E. Joint Instruction.

Pursuant to Section 7 of the Escrow Agreement, dated as of October 22, 2024 (the "Escrow Agreement"), by and among by and among, Hollister & Blacksmith, Inc., a Colorado corporation (“Hollister & Blacksmith”) doing business as American Cannabis Company, Inc., a Delaware corporation (“Company”); Ellis Smith, an Individual (“Smith”); TEC, LLC, a Florida limited liability company (“TEC”); Medihemp, LLC (“Medihemp”) and its wholly owned subsidiaries, SLAM Enterprises, LLC (“SLAM”) and Medical Cannabis Caregivers, Inc. (“Medical Cannabis”) (collectively, the “Saunders Entities”); Roger Scott Saunders an individual (“Saunders”); and, Mailander Law Office, Inc., a California corporation (“Escrow Agent”), the Company and TEC hereby instruct the Escrow Agent that the Post-Closing Adjustment (as defined in the Purchase Agreement by and between the Seller and Purchaser is to be disbursed as follows:

$[_____] to Seller; and

$[_____] to Purchaser.

The Escrow Agent is hereby instructed to disburse such funds from the Escrow Account.

All terms beginning with initial capital letters not otherwise defined in this instruction have the same meaning as set forth in the Escrow Agreement.

Dated: [date].

HOLLISTER & BLACKSMITH, INC., dba AMERICAN CANNABIS COMPANY, INC.

By:
Name:	Ellis Smith
Title:	CEO, CFO

TEC, LLC

By:
Name:	Joseph Cleghorn
Title:	Manager

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SAUNDERS ENTITIES

By:
Name:	Scott Saunders
Title:	Manager, Director

ROGER SCOTT SAUNDERS (“SAUNDERS”)

By:
Name:	Roger Scott Saunders
Title:	As an Individual

ELLIS SMITH (“SMITH”)

By:
Name:	Ellis Smith
Title:	As an Individual

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Exhibit F. Fee Schedule.

Escrow Fees are non-refundable and due and payable upon execution of this Agreement in the amount of one percent (1%) of the total purchase price under the stock purchase agreement, equal to $3,100.00. The Parties agree that the Company is responsible for payment of the Escrow Fees. The Escrow Fees do not include a total of the fees and costs that may be attributable under Sections 11, 13, and 15 of the Escrow Agreement,

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Exhibit 10.3

Assignment and Assumption Agreement with Release

This Assignment and Assumption Agreement with Release ("Agreement") dated as of November 1, 2024 ("Effective Date"), is entered into by and among American Cannabis Company, Inc., a Delaware corporation (“Assigning Party”), and Hollister & Blacksmith, Inc., a Colorado corporation, and Ellis Smith, an Individual (jointly and severally, the “Assuming Parties”).

Additionally, due to the secured interests held by Medihemp, LLC (“Medihemp”) and its wholly owned subsidiaries, SLAM Enterprises, LLC (“SLAM”) and Medical Cannabis Caregivers, Inc. (“Medical Cannabis”) (collectively, the “Saunders Entities”), over certain assets of the Assigning Party (generally, the “Cannabis Licenses” or the “Saunders Transaction”), the Saunders Entities are joined to this Agreement as third-party beneficiaries.

Unless otherwise noted, the Assigning Party, Assuming Parties, and the Saunders Entities may be collectively referred to as the “Parties.”

RECITALS

WHEREAS, the Assigning Party is engaged in the operation of its cannabis business and is subject to various liabilities and obligations arising from its current operations, including but not limited to secured interests, outstanding judgments, accounts payable, taxes due, debts, claims, employee salaries, and all other obligations arising from Assigning Party’s operations, as listed on Schedule “A” (collectively, the “Assigned Liabilities”);

WHEREAS, Assuming Party Ellis Smith, the sole officer and director of both the Assigning Party and the Assuming Parties, has agreed to personally assume, jointly and severally with Hollister & Blacksmith, Inc., all Assigned Liabilities, including but not limited to those listed on Schedule “A,” in any way related to Assigning Party’s operations. Smith and Hollister & Blacksmith shall be jointly and severally liable for all amounts due under such Assigned Liabilities, including any and all debts, obligations, costs, attorney fees, liabilities, or claims arising from the Assigned Liabilities, whether known or unknown, contingent or accrued. This assumption includes, without limitation, (i) all secured and unsecured liabilities, (ii) all outstanding amounts due to the Saunders Entities arising from the Saunders Transaction, as well as any secured interests held by the Saunders Entities, that have been perfected by UCC-1 financing statements over Assigning Party’s Cannabis Licenses and any other collateral (as listed in Schedule “C” to the Stock Purchase Agreement between Assigning Party and TEC, LLC, incorporated herein by reference) (This assumption of liabilities is following C.R.S. § 4-3-116, governing joint and several liability for parties who assume liability on secured obligations or instruments) and (iii) any other Third-Party creditors of Assigning Party.

DEFINITIONS

“Assigned Liabilities” means those liabilities on Schedule “A” to the Stock Purchase Agreement between Assigning Party and TEC, LLC, dated November 1, 2024, which is incorporated by reference into this Agreement.

“Saunders Transaction” means Assigning Party’s acquisition of assets from the Saunders Entities on March 11, 2021, as amended on April 29, 2022, and June 8, 2023, of fixed assets and associated intellectual property, including the following Licenses issued by the Colorado Marijuana Enforcement Division (“MED”) and the corresponding City of Colorado Springs (“City”): (i) Medihemp’s, SLAM’s and Medical Cannabis’ respective Medical Marijuana Center Licenses; (ii) Medical Cannabis’ Medical Marijuana Infused Product Manufacturer License; and, (iii) Medical Cannabis’ Medical Marijuana Optional Premises Cultivation License.

“Secured Assets” means those assets of Seller for which the Saunders Entities have a secured UCC financing statement interest consisting of “All of the business Assets and all replacements, substitutions, accessions, additions, and improvements thereto; all Licenses issued by the Colorado Marijuana Enforcement Division, specifically 403-00070 402-00539, 402-01065, 40200053, and 404-00312 and the corresponding City of Colorado Springs Licenses; and, all proceeds and products of each of the foregoing, all books and records relating to the foregoing, all supporting obligations related thereto, and all accession to, substitutions and replacements for, and rents, profits and products of, each of the foregoing, and any and all Proceeds of any insurance, indemnity, warranty or guaranty payable to the Grantor from time to time with respect to any of the foregoing. Notwithstanding the foregoing, the Collateral shall not include marijuana, marijuana plants, or marijuana products.”

“Stock Purchase Agreement” means the stock purchase agreement between the Assigning Party and TEC, LLC, dated November 1, 2024, which is incorporated by reference into this Agreement, including all Schedules and Exhibits.

“Third Party Claims” means all claims, demands, actions, causes of action, suits, proceedings, assessments, judgments, liabilities, losses, damages, fines, penalties, costs, and expenses (including reasonable attorney fees and disbursements) asserted or brought by any person or entity other than the parties to this Agreement, arising out of or related to the operations, assets, or obligations of Assigning Party or any of its subsidiaries or affiliates, whether known or unknown, contingent or accrued, and existing prior to or as of the effective date of this Agreement. This includes but is not limited to, claims relating to contracts, torts, regulatory compliance, tax obligations, environmental matters, employment-related issues, and intellectual property matters.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

Assignment and Assumption.

1.1 Assignment. Assigning Party irrevocably sells, assigns, grants, conveys, and transfers to Assuming Parties all Assigning Party's rights, title, obligations, debt, liability, and interest in and to the Assigned Liabilities in Schedule “A,” the Saunders Transaction, and any Third-Party claims.

1.2 Assumption. Assuming Parties unconditionally accepts such assignment and jointly and severally assumes all Assigning Party's duties, debt, liabilities, and obligations under the Assigned Liabilities in Schedule “A,” the Saunders Transaction, and any Third-Party claims and agrees to pay, perform, and discharge, as and when due, all the obligations of Assigning Party und, including all attorney fees, penalties, interest and costs of any kind.

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1.3 Assuming Party Ellis Smith, the sole officer and director of both the Assigning Party and the Assuming Parties, has agreed to personally assume, jointly and severally with Hollister & Blacksmith, Inc., all Assigned Liabilities, including but not limited to those listed on Schedule “A,” the Saunders Transaction, and any Third-Party claims. Assuming Parties shall be jointly and severally liable for all amounts due, including all debts, obligations, liabilities, or claims arising from Assigning Party’s operations, whether known or unknown, contingent or accrued. This assumption includes, without limitation, all secured and unsecured liabilities, Third-Party Claims, all outstanding amounts due under the Assigned Liabilities and to the Saunders Entities, and any other creditors, as well as any secured interests held by the Saunders Entities, which have been perfected by UCC-1 financing statements over Assigning Party’s Cannabis Licenses (as listed in Schedule “C” to the Stock Purchase Agreement between Assigning Party and TEC, LLC) and any other collateral. This assumption of liabilities is in accordance with C.R.S. § 4-3-116, governing joint and several liability for parties who assume liability on secured obligations or instruments.

(a) Ellis Smith and Hollister & Blacksmith, Inc. each hereby covenants and agrees not to voluntarily initiate or file for bankruptcy protection under any applicable bankruptcy or insolvency law. Any breach of this covenant shall be deemed a material breach of this Agreement.

(b) Ellis Smith and Hollister & Blacksmith, Inc. each personally guarantees the full performance of all obligations assumed under this Agreement. If bankruptcy proceedings are initiated, the Assigning Party shall have the right to pursue a claim for breach of contract and/or fraud in connection with the non-performance of Assigned Liabilities.

(c) If Ellis Smith and Hollister & Blacksmith, Inc. (i) voluntarily or involuntarily becomes subject to any bankruptcy or insolvency proceedings, or (ii) initiates any bankruptcy filing, all Assigned Liabilities assumed by Ellis Smith and Hollister & Blacksmith, Inc. under this Agreement shall immediately become due and payable in full.

(d) If Ellis Smith (i) voluntarily or involuntarily becomes subject to any bankruptcy or insolvency proceedings, or (ii) initiates any bankruptcy filing, all Assigned Liabilities assumed by Ellis Smith and Hollister & Blacksmith, Inc. under this Agreement shall immediately become due and payable in full.

Consideration for the Assignment.

2.1 The Assigning Party is currently indebted to the Assuming Party, Ellis Smith, under two related party promissory notes dated November 22, 2022, and February 14, 2023, in the principal amounts of one hundred fifty thousand dollars ($150,000) and one hundred thousand dollars ($100,000), respectively, with interest accruing on each balance at rates of 18% and 15% per annum, respectively.

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2.2 Concurrently with the execution of this Agreement, the Assigning Party and TEC, LLC entered into a Stock Purchase Agreement and an Escrow Agreement. Under these agreements, the Assigning Party agrees to sell shares of its common stock to TEC, LLC, in exchange for three hundred and ten thousand dollars ($310,000).

(a) Section 4(b) of the Escrow Agreement contains instructions for the payment of outstanding fees related to the Assigning Party’s operations from the proceeds of the stock purchase, consistent with Sections 2.02 and 2.03 of the Stock Purchase Agreement, with the remaining balance of at least $135,000 to be paid to the Saunders Entities for the benefit of the Assigning Party, and by extension, credited to the Assuming Parties for outstanding amounts due to the Saunders Entities under the Saunders Transaction (see Section (b) below).

(b) As additional consideration under the Stock Purchase Agreement, Section 2.02 (iii)(d), the Assigning Party agreed to assign to the Assuming Parties, conditioned upon (a) the receipt of Contingent Approval Letters of the Change of Ownership from the Colorado Department of Revenue (1 CCR 212-3:2-245 pursuant to 1 CCR 212-3:2-245 (A) & (D), Marijuana Enforcement Division, and the City of Colorado Springs, the Licenses associated with the Saunders Transaction and the Secured Assets.

2.3 As consideration for this Agreement, Assuming Parties, along with all successors, assigns, pledgees, employees, agents, independent contractors, affiliates, administrators, and any persons or business entities acting through them, agree to release the Assigning Party from any and all liability arising from the November 22, 2022, and February 14, 2023, promissory notes. This release is contingent upon receipt of the final payment under the Stock Purchase Agreement, as outlined in Sections 2.02 and 2.03 of the stock purchase agreement and Section 4(b) of the escrow agreement.

2.4 Upon payment of the final payment pursuant to Section 2.03 of the stock purchase agreement and Section 4 of the escrow agreement, Assuming Parties agrees on behalf of themselves, and their respective successors, assigns, pledgees, employees, agents, independent contractors, affiliates, administrators, and any and all persons or business entities acting by and through them as the case may be, to irrevocably and unconditionally and completely remise, release, acquit, satisfy and forever discharge Assigning Party, specifically including its agents, directors, officers, affiliates, employees representatives, insurance carriers, attorneys, divisions and subsidiaries, (and all agents, directors, officers, employees, representatives, insurance carriers, and attorneys of such divisions and subsidiaries), and their predecessors, successors, administrators and assigns, and all persons acting by, through, under, or in concert with any of them (collectively "Releases"), of and from any and all claims, actions, causes of action, suits, debts, charges, complaints, claims, liabilities, obligations, promises, agreements, controversies, damages, and expenses (including attorney fees and costs actually incurred), of any nature whatsoever, known or unknown, in law or equity, arising out of the November 22, 2022 and February 14, 2023 promissory notes, including all principal, interest, default interest and penalties of any kind or sort.

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2.5 This is intended as a complete release and discharge of any or all claims that Assuming Parties may or might have had against Assigning Party on account of the November 22, 2022, and February 14, 2023 notes, including all interest, costs, and attorney fees, and Assuming Parties do so in the full and final settlement, release, and discharge of any and all such claims and intends to and does forever hereby release and discharge Assigning Party of and from any and all liability of any nature whatsoever for all damages, specifically including, but not limited to all past, present and future rights to recover for sums of money compromised in this Agreement on account of the November 22, 2022, and February 14, 2023 notes, whether the same or any circumstances pertaining thereto are now known or unknown to Assuming Parties, expected or unexpected by Assuming Parties, or have already appeared or developed or may now be latent or may in the future appear or develop or become known to Assuming Parties.

2.6 Dispute Resolution of Balance Due Under Sections 2.02 and 2.03 of the stock purchase agreement and Section 4 of the escrow agreement. Any dispute, controversy, or claim arising out of or related to the amounts due under this Agreement, including but not limited to the amounts referenced in Sections 2.02 and 2.03 of the Stock Purchase Agreement and Section 4 of the Escrow Agreement, shall be resolved through binding arbitration administered by JAMS in accordance with its Comprehensive Arbitration Rules and Procedures. The arbitration shall take place in San Diego, California. The arbitration proceedings and any discovery, motions, hearings, or other arbitration-related matters shall be governed by the laws of the State of California without regard to its conflict of laws principles. The prevailing party in any such arbitration shall be entitled to recover all reasonable attorney fees, arbitration costs, and other expenses incurred in connection with the arbitration, including but not limited to any fees and expenses related to expert witnesses or other services reasonably required to conduct the arbitration. The party initiating arbitration shall bear the costs of the JAMS filing fees and any other costs required to commence the arbitration proceedings, but such costs may be recoverable as part of the final award if the initiating party prevails, as determined by the arbitrator. The arbitrator’s decision shall be final and binding on all parties, and judgment upon the award rendered by the arbitrator may be entered in any court of competent jurisdiction.

Representations and Warranties.

3.1 Assigning Party's Representations and Warranties. Assigning Party represents and warrants as follows:

(a) It is duly organized, validly existing, and in good standing under the laws of the State of Delaware.

(b) It is qualified and licensed to do business and in good standing in every jurisdiction where such qualification and licensing is required for purposes of this Agreement.

(c) It has the full right, corporate power, and authority to enter into this Agreement and to perform its obligations hereunder.

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(d) It has taken all necessary corporate action to authorize the execution of this Agreement by its representative, whose signature is set forth at the end hereof.

(e) When executed and delivered by it, this Agreement will constitute the legal, valid, and binding obligation of the Assigning Party, enforceable against it in accordance with its terms and not subject to defenses.

3.2 Assuming Parties Representations and Warranties. The Assuming Parties represent and warrant as follows:

(a) Assuming Party Hollister & Blacksmith is duly organized, validly existing, and in good standing under the laws of Colorado.

(b) It is qualified and licensed to do business and in good standing in every jurisdiction where such qualification and licensing is required for purposes of this Agreement.

(c) It has the full right, corporate power, and authority to enter into this Agreement and to perform its obligations hereunder.

(d) It has taken all necessary corporate action to authorize the execution of this Agreement by its representative, whose signature is set forth at the end hereof.

(e) When executed and delivered by it, this Agreement will constitute the legal, valid, and binding obligation of Assuming Party Hollister & Blacksmith, enforceable against it in accordance with its terms.

(f) Assuming Party Ellis Smith acknowledges that he has independently reviewed the terms and conditions of this Agreement with his own financial and legal advisors and fully understands the legal and financial implications of assuming joint and several liabilities for the Assigned Liabilities, the Saunders Transaction, and all third-party claims related to Assigning Party’s operations.

Indemnification.

4.1 Assuming Parties (collectively, the “Indemnifying Parties”) shall jointly and severally indemnify, defend, and hold harmless Assigning Party American Cannabis Company, Inc. (“ACC”) and its directors, officers, control persons, shareholders, affiliates, attorneys, employees, representatives, agents, successors, assigns, and any other persons acting on behalf of ACC (collectively, the “Indemnified Parties”) from and against any and all losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs, or expenses of any kind, including reasonable attorneys’ fees and the costs of enforcing any right to indemnification under this Agreement (collectively, “Losses”), that arise out of or result from any third-party claim, action, suit, demand, lawsuit, existing judgment, arbitration, proceeding, or investigation (collectively, “Claims”), relating to or arising from the Assigned Liabilities or the Saunders Transaction under this Agreement, including but not limited to:

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(a) A material breach or non-fulfillment of any material representation, warranty, or covenant under/representation or warranty set forth in this Agreement by Indemnifying Parties or its representatives.

(b) any grossly negligent or more culpable act or omission of the Indemnifying Parties or any of its representatives (including any reckless or willful misconduct) in connection with the performance of its obligations under this Agreement; or

(c) any failure by the Indemnifying Parties to materially comply with any applicable federal, state, or local laws, regulations, or codes in the performance of its obligations under this Agreement.

4.2 Exceptions and Limitations on Indemnification. Despite anything to the contrary in this Agreement, the Indemnifying Parties are not obligated to indemnify or defend the Indemnified Party against any Claim if such Claim or corresponding Losses arise out of or result from, in whole or in part, Indemnified Party's:

(a) Gross negligence or willful misconduct.

4.3 Third-Party Claims Handling.

4.4 Notification: The Indemnified Party shall promptly notify the Indemnifying Parties in writing of any third-party Claim for which indemnification is sought. Failure to provide prompt notice shall not relieve the Indemnifying Parties of their indemnification obligations unless the failure materially prejudices their ability to defend the Claim.

4.5 Defense of Claims: Upon receiving notice of a Claim, the Indemnifying Parties shall, at their own expense, assume the defense of such Claim with counsel reasonably acceptable to the Indemnified Party. The Indemnified Party may participate in the defense at its own expense. If the Indemnifying Parties fail to promptly assume the defense, the Indemnified Party may, without waiving any rights to indemnification, assume the defense and settle the Claim at the Indemnifying Parties’ expense.

4.6 Settlement of Claims: The Indemnifying Parties shall not settle any third-party Claim without the prior written consent of the Indemnified Party, which shall not be unreasonably withheld or delayed. The Indemnified Party may withhold consent if the settlement does not include an unconditional release of the Indemnified Party from all liability or imposes any obligations on the Indemnified Party.

4.7 Payment of Losses: The Indemnifying Parties shall promptly pay to the Indemnified Party any Losses incurred in connection with the Claim upon final settlement or adjudication of the Claim, provided that the Losses were subject to indemnification under this Agreement.

4.8 Sole Remedy. THIS SECTION 4 SETS FORTH THE ENTIRE LIABILITY AND OBLIGATION OF THE INDEMNIFYING PARTIES AND THE SOLE AND EXCLUSIVE REMEDY FOR THE INDEMNIFIED PARTY FOR ANY LOSSES COVERED UNDER SECTION 4.

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Miscellaneous.

5.1 Further Assurances. On the other party's reasonable request, each Party shall, at its sole cost and expense, execute and deliver all such further documents and instruments and take all such further acts necessary to give full effect to this Agreement.

5.2 Survival. Subject to the limitations and other provisions of this Agreement: (a) the representations and warranties of the Parties contained herein will survive the expiration or earlier termination of this Agreement for a period of (36) thirty-six months after such expiration or termination.

5.3 Notices. Each party shall deliver all notices, requests, consents, claims, demands, waivers, and other communications under this Agreement (each, a "Notice") in writing and addressed to the other party at its address set forth below (or to such other address that the receiving party may designate from time to time in accordance with this section). Each party shall deliver all Notices by personal delivery, nationally recognized overnight courier (with all fees pre-paid), facsimile or email (with confirmation of transmission), or certified or registered mail (in each case, return receipt requested, postage prepaid). Except as otherwise provided in this Agreement, a Notice is effective only (a) on receipt by the receiving party and (b) if the party giving the Notice has complied with the requirements of this Section.

Notice to Assigning Party:	American Cannabis Company, Inc.
	Attention: Mr. Ellis Smith
	1004 South Tejon Street smith@americancannabisconsulting.com
Notice to Assuming Parties, Smith:	2590 Walnut St Suite #6
	Denver CO 80205
	smith@americancannabisconsulting.com
Notice to Saunders Parties:	Roger Scott Saunders
	16208 16th Ave SW
	Burien, WA 98166 E-mail: rssriparian@gmail.com
	with a copy (which shall not constitute notice) to: Law Offices of Clifton Black PC c/o Clifton Black 2 N. Cascade, 11th Floor Colorado Springs, CO 80903 Email: Cliff@Cliftonblacklaw.com

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5.4 Interpretation. For purposes of this Agreement: (a) the words "include," "includes," and "including" are deemed to be followed by the words "without limitation"; (b) the word "or" is not exclusive; and (c) the words "herein," "hereof," "hereby," "hereto," and "hereunder" refer to this Agreement as a whole. Unless the context otherwise requires, references in this Agreement: (x) to sections, schedules, and exhibits mean the sections of, and schedules and exhibits attached to, this Agreement; (y) to an agreement, instrument, or other document means such agreement, instrument, or other document as amended, supplemented, and modified from time to time to the extent permitted by the provisions thereof; and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. The parties drafted this Agreement without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted. The schedules and exhibits referred to herein are an integral part of this Agreement to the same extent as if they were set forth verbatim herein.

5.5 Headings. The headings in this Agreement are for reference only and do not affect the interpretation of this Agreement.

5.6 Severability. If any term or provision of this Agreement is invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability does not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. On such determination that any term or other provision is invalid, illegal, or unenforceable, the parties to this Agreement shall negotiate in good faith to modify this Agreement so as to affect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

5.7 Entire Agreement. This Agreement, together with all related exhibits and schedules, is the sole and entire agreement of the parties to this Agreement regarding the subject matter contained herein and therein and supersedes all prior and contemporaneous understandings, agreements, representations, and warranties, both written and oral, regarding such subject matter.

5.8 Amendment and Modification. No amendment to or rescission, termination, or discharge of this Agreement is effective unless it is in writing, identified as an amendment to or rescission, termination, or discharge of this Agreement and signed by an authorized representative of each party to this Agreement.

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5.9 Waiver.

(a) No waiver under this Agreement is effective unless it is in writing, identified as a waiver to this Agreement, and signed by an authorized representative of the party waiving its right.

(b) Any waiver authorized on one occasion is effective only in that instance and only for the purpose stated and does not operate as a waiver on any future occasion.

(c) None of the following is a waiver or estoppel of any right, remedy, power, privilege, or condition arising from this Agreement:

(i) any failure or delay in exercising any right, remedy, power, or privilege or in enforcing any condition under this Agreement; or

(ii) any act, omission, or course of dealing between the parties.

5.10 Cumulative Remedies. All rights and remedies provided in this Agreement are cumulative and not exclusive, and the exercise by either party of any right or remedy does not preclude the exercise of any other rights or remedies that may now or subsequently be available at law, in equity, by statute, in any other agreement between the parties, or otherwise. Despite the previous sentence, the parties intend that Indemnified Party's rights under Section 4 are its exclusive remedies for the events specified therein.

5.11 Equitable Remedies. Each of Assigning Party and Assuming Party acknowledges that a breach or threatened breach by it of any of its obligations under this Agreement would give rise to irreparable harm to the other Party for which monetary damages would not be an adequate remedy and hereby agrees that if a breach or a threatened breach occurs, the other Party will, in addition to any and all other rights and remedies that may be available to it arising from such breach, be entitled to seek equitable relief, including a temporary restraining order, an injunction, specific performance, and any other relief that may be available from a court of competent jurisdiction (without any requirement to post bond).

5.12 No Third-Party Beneficiaries. Except for the Saunders Parties as third-party beneficiaries, this Agreement solely benefits the Assigning Party and Assuming Parties and their respective permitted successors and permitted assigns, and nothing in this Agreement, express or implied, confers on any other Person any legal or equitable right benefit, or remedy of any nature whatsoever under or because of this Agreement.

5.13 Choice of Law. This Agreement and all related documents, including all exhibits and schedules attached hereto, and all matters arising out of or relating to this Agreement, whether sounding in contract, tort, or statute, are governed by and construed in accordance with the laws of the State of California, United States of America (including its statutes of limitations), without giving effect to the conflict of laws provisions thereof to the extent such principles or rules would require or permit the application of the laws of any jurisdiction other than those of the State of California.

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5.14 Choice of Forum. Unless otherwise noted in Section 2.6 of this Agreement, each party irrevocably and unconditionally agrees that it will not commence any action, litigation, or proceeding of any kind whatsoever against the other party in any way arising from or relating to this Agreement and exhibits and schedules attached hereto, and all contemplated transactions, including, but not limited to, contract, equity, tort, fraud, and statutory claims, in any forum other than the US District Court for the Southern District of California or, if such court does not have subject matter jurisdiction, the courts of the State of California sitting in San Diego County, California and any appellate court from any thereof. Each party irrevocably and unconditionally submits to the exclusive jurisdiction of such courts and agrees to bring any such action, litigation, or proceeding only in the US District Court for the Southern District of California or, if such court does not have subject matter jurisdiction, the courts of the State of California sitting in San Diego County. Each party agrees that a final judgment in any such action, litigation, or proceeding is conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

5.15 Waiver of Jury Trial. Each party acknowledges and agrees that any controversy that may arise under this Agreement, including exhibits and schedules attached to this Agreement, is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury about any legal action arising out of or relating to this Agreement, including any exhibits or schedules attached to this Agreement, or the transactions contemplated hereby. Each party certifies and acknowledges that (a) no Representative of the other party has represented, expressly or otherwise, that such other party would not seek to enforce the foregoing waiver if of a legal action, (b) such party has considered the implications of this waiver, (c) such party makes this waiver voluntarily, and (d) such party has been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section.

5.16 Counterparts. This Agreement may be executed in counterparts, each of which is deemed an original, but all of which together are deemed to be one and the same agreement. A signed copy of this Agreement delivered by email or other means of electronic transmission is deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

[signature page follows]

Page 11 of 12

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.

	AMERICAN CANNABIS COMPANY, INC. [ASSIGNING PARTY]
	By
	Name:	Ellis Smith
	Title:	CEO/CFO

	ELLIS SMITH, INDIVIDUALLY [ASSUMING PARTY]
	By
	Name:	Ellis Smith
	Title:	as an Individual

	HOLLISTER & BLACKSMITH, INC. [ASSUMING PARTY]
	By
	Name:	Ellis Smith
	Title:	CEO, CFO

APPROVED AS TO FORM:

SAUNDERS ENTITIES

By
Name:	Roger Scott Saunders
Title:	Manager, Director

LAW OFFICES OF CLIFTON BLACK, PC

By
Name:	Clifton Black
Title:	Counsel for Saunders Entities

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Exhibit 10.3.1

SCHEDULE A

Assigned Liabilities

PENDING LEGAL ACTIONS:

Case Name: American Express National Bank vs. Ellis Smith and Hollister & Blacksmith, Inc., dba American Cannabis Company, Inc., filed on or about April 2, 2024, in the District Court for Denver County Colorado: Case No. 2024CV31104.

Case Name: OldCastle Lawn & Garden vs. Hollister & Blacksmith, Inc., dba American Cannabis Company, Inc. filed on January 26, 2024, in the District Court for Jefferson County Colorado: Case No. 2024CV30125.

UNASSERTED OR THREATENED CLAIMS:

As a result of American Cannabis Company, Inc.’s March 11, 2021 acquisition of the assets of Medihemp, LLC (“Medihemp”) and its wholly owned subsidiaries, SLAM Enterprises, LLC (“SLAM”) and Medical Cannabis Caregivers, Inc. (“Medical Cannabis”) (collectively, the “Saunders Entities”), as amended on April 29, 2022, and June 8, 2023, American Cannabis Company, Inc. is in breach of its covenants to repay the purchase price. As of the date hereof, the company is indebted to the Saunders Entities in the approximate amount of five hundred and twenty-nine thousand sixty-three dollars ($529,063), which includes principal, interest, default penalties, and default interest. These amounts continue to accrue.

In addition, the Saunders Entities have filed a secured UCC financing statement, which covers the following collateral:

All of American Cannabis Company, Inc.’s business assets, including all replacements, substitutions, accessions, additions, and improvements thereto;

All licenses issued by the Colorado Marijuana Enforcement Division, specifically License Nos. 403-00070, 402-00539, 402-01065, 402-00053, and 404-00312, along with corresponding City of Colorado Springs licenses;

All proceeds and products derived from the aforementioned assets and licenses, including books and records related thereto;

All supporting obligations, accessions, substitutions, replacements, rents, profits, and products arising from the foregoing;

Page 1 of 3

Any and all proceeds from insurance, indemnity, warranty, or guaranty payments related to any of the foregoing.

Although American Cannabis Company, Inc. is in breach of its obligations to the Saunders Entities, as of the effective date of this Agreement, the Saunders Entities have not filed a foreclosure of their UCC-secured interests nor initiated any lawsuit for damages related to the breach.

On May 31, 2023, American Cannabis Company, Inc. (“ACC”) sold its Colorado State License No. 402-01065 (Medical Marijuana Store) and its City of Colorado Springs License No. 0850714L, in exchange for a purchase price of $100,000. This transaction resulted in the discontinuation of ACC’s associated operations at Palmer Park Boulevard, Ste. A, Colorado Springs, CO, as of May 31, 2023. Furthermore, ACC’s lease obligations for this location terminated without penalty, interest, or other liquidated damages as of June 30, 2023.

The proceeds from this license sale were not directed to the secured interest holder, raising potential issues regarding the priority of the secured party’s interests in the license assets. Such actions may constitute a possible violation of the secured party’s rights under applicable secured transactions law, potentially leading to contract or tort liability claims. This includes but is not limited to, claims for conversion, breach of contract, or other tortious actions associated with any non-compliance with the secured party’s interest priority.

The Assuming Party assumes responsibility for any resulting liabilities, damages, or claims, including legal fees, arising from this transaction. This includes any claims by the secured party for non-compliance with the interest priority or any other asserted damages related to the sale of the license.

OUTSTANDING TAX LIABILITIES TO THE STATE OF DELAWARE:

The company has filed its 2023 U.S. federal tax return, Colorado state tax return, and Delaware state tax return. Smith and Hollister & Blacksmith, Inc. shall be jointly and severally responsible for any and all outstanding taxes owed, including any penalties and interest that have accrued or may accrue, associated with these filings or any prior tax obligations, whether state or federal.

CURRENT OUTSTANDING PAYABLES:

Employee Compensation. All employment contracts, agreements, or arrangements of any kind (collectively, “Employment Contracts”) between American Cannabis Company, Hollister & Blacksmith, Inc., Ellis Smith, Naturaleaf, and any person actively employed by any of these entities or their subsidiaries, affiliates, assigns, agents, co-employees, or independent contractors (collectively, the “Affected Employees”), whether oral or written, express or implied, shall be assumed jointly and severally by Hollister & Blacksmith, Inc. and Ellis Smith. This assumption includes all outstanding liabilities related to employee compensation, benefits, accrued wages, bonuses, severance, or any other obligations arising from Employment Contracts under Colorado state or federal law for the employees at the Naturaleaf stores in Colorado Springs, including the associated cultivation facility and any other locations.

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Pacific Stock Transfer Company. $8,342.10 owed.

Current Payables. A schedule of current payables from operations is attached below.

All Outstanding Operations Expenses. Without limitation, any and all known and unknown claims, liabilities, obligations, debts, damages, and responsibilities of any nature, whether contingent, accrued, or otherwise, arising from the operations of American Cannabis Company, Inc. up to the closing date of the Stock Purchase Agreement. This includes but is not limited to, claims related to contracts, employment, taxes, regulatory compliance, litigation (pending or threatened), and any obligations arising under federal, state, or local law.

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Exhibit 10.3.2

PERSONAL GUARANTEE OF ELLIS SMITH

RECITALS

WHEREAS, American Cannabis Company, Inc. (“ACC”), and TEC, LLC (“Buyer”) have entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) under which the Buyer will purchase a majority of the issued and outstanding shares of ACC, resulting in a change of control.

WHEREAS, in connection with the Stock Purchase Agreement, ACC has entered into an Assignment and Assumption Agreement (the “Assignment Agreement”) with Ellis Smith and Hollister & Blacksmith, Inc., under which Ellis Smith and Hollister & Blacksmith, Inc. (collectively, the “Assuming Parties”) shall assume jointly and severally all Assigned Liabilities of ACC, as detailed in Schedule A - “Assigned Liabilities” of the Assignment Agreement.

WHEREAS, under the Assignment Agreement, the Assuming Parties have agreed to indemnify, defend, and hold ACC harmless from any and all losses, claims, damages, liabilities, and expenses arising from the Assigned Liabilities to provide ACC and its officers, directors, and affiliates with a release of claims.

WHEREAS, Ellis Smith has further agreed to provide a personal guarantee of the Assigned Liabilities, ensuring the complete and timely performance of such liabilities to protect ACC from any financial risk related to these obligations.

WHEREAS, ACC, the Buyer, and the Assuming Parties have agreed that the provisions of the Stock Purchase Agreement, Assignment Agreement, and Release of Claims are intended to facilitate the Buyer’s acquisition while safeguarding ACC’s interests in the event of any future bankruptcy or insolvency proceedings involving the Assuming Parties.

NOW, THEREFORE, in consideration of the mutual covenants set forth herein and in the agreements referenced above, the parties hereby agree as follows:

DEFINITIONS

1. “Assigned Liabilities” shall mean all liabilities, obligations, debts, claims, and expenses, both known and unknown, contingent or accrued, that have been assumed by Ellis Smith and Hollister & Blacksmith, Inc. pursuant to the Assignment and Assumption Agreement and listed in Schedule A – “Assigned Liabilities.”

2. “Assuming Parties” shall collectively refer to Ellis Smith and Hollister & Blacksmith, Inc., who are jointly and severally responsible for the Assigned Liabilities as outlined in this Agreement and in the Assignment and Assumption Agreement.

3. “Bankruptcy or Insolvency Proceeding” shall mean any voluntary or involuntary case under Title 11 of the United States Code (the U.S. Bankruptcy Code), or any other legal process or proceeding under federal, state, or foreign law for the adjustment, restructuring, reorganization, liquidation, or discharge of debts of Ellis Smith or Hollister & Blacksmith, Inc.

4. “Buyer” shall refer to TEC, LLC, the entity purchasing a majority of the issued and outstanding shares of American Cannabis Company, Inc. (“ACC”) as described in the Stock Purchase Agreement.

5. “Guarantor” shall refer to Ellis Smith, who has agreed to guarantee the performance of the Assigned Liabilities personally.

6. “Release of Claims” shall refer to the mutual release between ACC and the Assuming Parties, whereby ACC is indemnified and held harmless from any future claims, damages, or liabilities arising from the Assigned Liabilities.

7. “Stock Purchase Agreement” shall mean the agreement between ACC and TEC, LLC for purchasing a majority of ACC’s issued and outstanding shares, resulting in a change of control.

8. “UCC Interests” shall mean the security interests perfected by the “Saunders Entities” or his affiliates pursuant to Uniform Commercial Code (UCC) filings over the assets and licenses previously held by ACC.

SECTION 1 PERSONAL GUARANTEE

1. Personal Guarantee of Assigned Liabilities

Ellis Smith (“Guarantor”) hereby personally guarantees the full and timely performance of all Assigned Liabilities detailed in this Agreement. Should Guarantor or any affiliated entity, including Hollister & Blacksmith, Inc., enter into or become subject to any bankruptcy or insolvency proceeding, this personal guarantee shall remain enforceable and binding, ensuring the complete discharge of all liabilities assumed from ACC. This guarantee is intended to survive any bankruptcy or similar proceedings, including under 11 U.S.C. § 523(a), which may render certain debts nondischargeable due to the nature of the obligations or any potential fraudulent conduct. This guarantee shall be enforceable to the maximum extent permitted by applicable law and shall not be invalidated by any automatic stay under 11 U.S.C. § 362 or otherwise.

2. Indemnification of ACC

Ellis Smith and Hollister & Blacksmith, Inc. (collectively, the “Assuming Parties”) agree to indemnify, defend, and hold harmless ACC, along with its officers, directors, shareholders, affiliates, employees, and agents, from and against all losses, claims, damages, liabilities, costs, and expenses, including reasonable attorney fees, arising from or related to the Assigned Liabilities. This indemnity obligation shall remain effective despite any termination of this Agreement and shall not be affected by any bankruptcy or insolvency proceedings involving the Assuming Parties.

3. Acceleration of Obligations upon Bankruptcy Filing

In the event that the Guarantor initiates or becomes subject to a bankruptcy or insolvency proceeding, all remaining obligations under the Assigned Liabilities shall become immediately due and payable in full, regardless of any previously agreed payment schedule or terms under this Agreement. This acceleration clause is intended to survive and operate in conjunction with 11 U.S.C. § 502 (allowance of claims or interests) to ensure that ACC may assert the total value of the liabilities as a claim in any bankruptcy proceeding.

4. Cross-Default Provision

A bankruptcy or insolvency event involving the Guarantor shall constitute a default under this and all related agreements with ACC. Upon such default, ACC shall have the right, at its discretion, to terminate this Agreement, demand immediate payment of all outstanding obligations, or pursue any other necessary actions to protect its interests. This cross-default provision is intended to give ACC standing to pursue a claim for the total outstanding balance under 11 U.S.C. § 365(e), recognizing any default triggered by a bankruptcy filing as an actionable claim.

5. Waiver of Certain Defenses

Guarantor hereby waives any and all defenses, claims, set-offs, and counterclaims that may be available to the Guarantor with respect to the enforcement of this personal guarantee, including, without limitation, any defense based on (i) lack of enforceability of the underlying debt, (ii) any extension, modification, or delay in enforcement by ACC, or (iii) any failure by ACC to pursue or exhaust other remedies.

6. No Right of Set-Off

The Guarantor shall have no right to set off, offset, or reduce the amounts owed under this personal guarantee based on any claims, rights, or counterclaims he may assert against ACC or any related entity or affiliate.

7. Continuation Upon Assignment

The obligations of the Guarantor under this personal guarantee shall remain in full force and effect regardless of any assignment of rights by ACC under this Agreement. Guarantor hereby consents to any such assignment and agrees that the guarantee shall continue for the benefit of ACC’s successors and assigns.

8. Consent to Jurisdiction and Venue

Guarantor consents to the exclusive jurisdiction and venue of the [appropriate court and jurisdiction, e.g., “state and federal courts of Colorado for any disputes arising under this personal guarantee and waives any right to challenge such jurisdiction or venue based on inconvenient forum or similar grounds.

9. Survival of Obligations

The obligations of the Guarantor under this personal guarantee shall survive the termination of this Agreement and any bankruptcy or insolvency proceedings involving the Guarantor or Hollister & Blacksmith, Inc., to the fullest extent permitted by law.

10. Subordination of Guarantor’s Claims

Any claim that the Guarantor or Hollister & Blacksmith, Inc. may have against ACC, whether now existing or hereafter arising, shall be subordinate in priority and right of payment to all obligations of the Guarantor under this personal guarantee, and Guarantor agrees that no payment on such subordinated claims shall be made until the Assigned Liabilities are fully satisfied.

11. Survival of Obligations

SECTION 2 REPRESENTATIONS OF GUARANTOR

1. Knowledge of Scope and Implications of Guarantee

The Guarantor hereby represents and warrants that he fully understands the scope, nature, and extent of his personal guarantee of the Assigned Liabilities as detailed in this Agreement. The Guarantor acknowledges that his guarantee is intended to be enforceable to the maximum extent permitted by law, including without limitation under applicable provisions of the United States Bankruptcy Code, Title 11 of the United States Code (the “Bankruptcy Code”).

2. Understanding of Bankruptcy Code Implications

The Guarantor represents that he is aware that certain obligations under this Agreement, particularly those related to the Assigned Liabilities, may be treated as nondischargeable in bankruptcy pursuant to 11 U.S.C. § 523(a) and other applicable provisions of the Bankruptcy Code. The Guarantor further acknowledges that, to the extent permitted by law, this guarantee is intended to survive any bankruptcy proceeding initiated by or against the Guarantor or Hollister & Blacksmith, Inc.

3. Independent Legal and Financial Advice

The Guarantor represents and warrants that he has consulted with independent legal and financial advisors regarding the implications of this personal guarantee, including but not limited to the enforceability of this guarantee under the Bankruptcy Code and the potential risks and liabilities involved. The Guarantor affirms that he has had adequate opportunity to review and understand the terms of this Agreement and the potential implications should he or Hollister & Blacksmith, Inc. enter into bankruptcy or insolvency proceedings.

4. No Reliance on Representations Outside Agreement

The Guarantor further represents and warrants that he is not relying on any statements or representations by ACC or its affiliates, officers, attorneys, or agents except as expressly stated in this Agreement. He acknowledges that he understands and accepts the risk that this personal guarantee may remain enforceable in bankruptcy, irrespective of other claims or obligations that may be discharged or altered.

American Cannabis Company, Inc.

By:

Name: Ellis Smith

Title: Director, CEO, CFO

Date: November 1, 2024

Ellis Smith, Individually

By:

Signature:

Date: November 1, 2024

Hollister & Blacksmith, Inc.

By:

Name: Ellis Smith

Title: CEO, President

Date: November 1, 2024

Exhibit 10.4

Settlement and Release of Claims Agreement

This Settlement and Release of Claims Agreement ("Agreement") is entered into by and between American Cannabis Company, Inc., a Delaware corporation (collectively, “ACC”), and Roger Scott Saunders, an individual, and Medihemp, LLC (“Medihemp”) and its wholly owned subsidiaries, SLAM Enterprises, LLC (“SLAM”) and Medical Cannabis Caregivers, Inc. (“Medical Cannabis”) (each formed and operating in their respective states of formation or corporation, and, together with Roger Scott Saunders, collectively referred to as the “Saunders Entities.” ACC and the Saunders Entities are collectively referred to as the "Parties") as of November 1, 2024 (the "Effective Date").

RECITALS

On March 11, 2021, ACC entered into an asset purchase agreement with the Saunders Entities. ACC purchased fixed assets and was assigned leases for three Medical Marijuana dispensaries located at 1004 S. Tejon Street, Colorado Springs, CO 80903, 2727 Palmer Park Blvd. Suite A, Colorado Springs, CO 80909, and 5875 Lehman Drive, Ste. 100, Colorado Springs, CO 80918.

Additionally, ACC acquired a Medical Marijuana Optional Premises Cultivation license and a Medical Marijuana-Infused Product Manufacturer license, along with fixed assets, all located at 2611 Durango Drive, Colorado Springs, CO 80910.

The purchase price for the acquisition was $2.2 million, and the issuance of 3 million shares of the Registrant’s restricted common stock. Payment terms required a $20,000 non-refundable payment upon signing, a cash payment of $1,080,000 after the receipt of the Contingent Approval Letters of the Change of Ownership applications from the MED and City, and the balance of $1,100,000 paid pursuant to a promissory note executed by Registrant effective upon receipt of the Contingent Approval Letters. The maturity date of the Promissory Note is 365 days from the Closing Date, includes 10% simple interest accruing annually, and is not subject to a pre-payment penalty.

On April 19, 2022, the Parties agreed to restructure the remaining payments due to be paid by ACC under the Note. The Parties agreed that in consideration of ACC’s payment of $550,000 and outstanding interest of $110,000, a new promissory note in the principal amount of $550,000 and 12% interest accruing annually, due April 29, 2023, resolved all of ACC’s payments of the purchase price. The Parties entered the amendment, and ACC paid the Saunders Entities the consideration of $550,000 in principal and $110,000 in interest.

On June 8, 2023, the Parties agreed to restructure the remaining payments due to be made by ACC under the Note, as amended, including principal and interest of Six Hundred Fifty-One Thousand, One Hundred Sixty-Two and 50/100 US Dollars ($651,162.50). ACC agreed to pay the Saunders Entities $150,000 by June 30, 2023; $100,000 by July 31, 2023; and the balance by May 1, 2024. Concurrently, ACC granted the Saunders Entities a first-priority lien and security interest on ACC’s assets, securing the payment and performance of the payment schedule. ACC made both 2023 payments and granted the Saunders Entities a first-priority lien and security interest on the assets of ACC, securing the payment and performance of the payment schedule. ACC has not paid the balance due and is in default.

On November 1, 2024, ACC executed a stock purchase agreement with TEC, LLC, a Delaware limited liability company (“TEC”). Under this agreement, ACC agreed to sell, and TEC committed to purchase shares of ACC common stock, resulting in a change of control for ACC. As part of the transaction, TEC structured its payment obligations to address outstanding compliance costs, beginning with a first tranche payment directed towards settling ACC’s overdue SEC filing fees for the quarters ending March 31, June 30, and September 30, 2024. Following the completion of these filings, TEC will provide a second tranche payment covering ACC’s auditing, legal, and accounting expenses required for filing its annual SEC report on Form 10-K. This second payment will also fund ACC’s accounting and legal costs for reapplying for a 15c2-11 listing, which was suspended due to the delayed filing of its June 30, 2024, quarterly report. The Parties agreed to escrow all funds consistent with the terms and conditions of the stock purchase agreement. Upon closing the stock purchase agreement, as defined below, the Parties agreed to revert the balance of the purchase price paid by TEC to the Saunders Entities at least one hundred and thirty-five thousand dollars ($135,000.00).

Consistent with the terms and conditions of the Stock Purchase Agreement and the associated Ancillary Agreement, the “Assignment and Assumption Agreement,” Ellis Smith and Hollister & Blacksmith, Inc., agreed to assign and assume the secured interests of the Saunders Entities, upon closing of the Stock Purchase Agreement.

NOW THEREFORE, in consideration for the mutual promises and covenants contained herein, the sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:

INCORPORATION OF RECITAL CLAUSES

The Parties acknowledge that all the representations set forth in the RECITALS clauses of this Agreement are incorporated herein by reference and made a material part of this Agreement with the same force and effect as if they were more fully set forth here. The Parties agree to waive any rule of contract construction or legal presumption that would prohibit any court of competent jurisdiction from construing or enforcing this Agreement based on the contents of the RECITALS above.

DEFINITIONS

“Ancillary Documents” means (i) the Stock Purchase Agreement between TEC, LLC, and ACC, (ii) the Escrow Agreement between TEC, ACC, and Mailander Law Office, Inc. (the “Escrow Agent”); (iii) all Exhibits and Schedules referenced in the Stock Purchase Agreement; and, (iv) any other transaction documents necessary to consummate the sale of the TEC and ACC.

“Assigned Liabilities” means those liabilities set forward on Schedule “A” to the Stock Purchase Agreement, including any and all secured and unsecured liabilities, amounts owed to creditors, debts, obligations, costs, attorney fees, liabilities, or claims arising from the Assigned Liabilities, whether known or unknown, contingent or accrued, and all outstanding amounts due to the Saunders Entities, and any other creditors, as well as any secured interests held by the Saunders Entities, which have been perfected by UCC-1 financing statements over Assigning Party’s Cannabis Licenses.

“Closing” means the completion of the transactions under the Stock Purchase Agreement, contingent upon the following actions: (1) the Agreement’s signing by both TEC and ACC, (2) TEC’s payment of the $310,000 Purchase Price to the Escrow Agent, and (3) ACC’s issuance of 302,900,458 shares of Seller’s common stock to the Buyer at $0.001023 per share. The consummation of these transactions will occur either in person or remotely via electronic exchange on a mutually agreed date, following the MED’s Contingent Approval Letter 1 CCR 212-3:2-245 pursuant to 1 CCR 212-3:2-245 (A) & (D).

“Escrow Agent” means Mailander Law Office, Inc.

“Escrow Account” means the Escrow Agent's IOLTA (interest on lawyer trust account) account.

“Stock Purchase Agreement” means the stock purchase agreement between TEC and ACC, including all exhibits and schedules.

SECTION 1.

CONDITIONS PRECEDENT TO RELEASE OF ALL CLAIMS BY THE SAUNDERS ENTITIES IN FAVOR OF ACC

This release will be effective upon the completion of the transactions under the Stock Purchase Agreement between ACC and TEC, including the following actions:

1. Execution of the Stock Purchase Agreement by both TEC and ACC,

2. TEC’s payment of the $310,000 Purchase Price to the Escrow Agent for disbursement consistent with the terms and conditions of the Escrow Agreement,

3. Issuance by the Seller of 302,900,458 shares of common stock to TEC at $0.001023 per share,

4. Issuance of MED’s Contingent Approval Letter under 1 CCR 212-3:2-245 (A) & (D), authorizing the transfer of the Medical Marijuana Optional Premises Cultivation license and a Medical Marijuana-Infused Product Manufacturer license to Hollister & Blacksmith, Inc. and Ellis Smith, and

5. Disbursement of at least $135,000 from escrow to the Saunders Entities in accordance with Section 2.03 of the Stock Purchase Agreement.

SECTION 2

RELEASE OF ALL CLAIMS UPON SATISFACTION OF CONDITIONS PRECEDENT

1. Except as provided for herein, and in further consideration of the mutual covenants hereto, the Saunders Entities agrees on behalf of themselves individually and collectively, and their respective successors, assigns, managers, officers, directors, shareholders, attorneys, employees, agents, independent contractors, affiliates, control persons, administrators, and any and all persons or business entities acting by and through them, to irrevocably and unconditionally remise, release, acquit, satisfy and forever discharge ACC, specifically including its agents, directors, officers, affiliates, employees, representatives, insurance carriers, and attorneys, (and all agents, directors, officers, employees, representatives, insurance carriers, and attorneys of such divisions and subsidiaries), and their predecessors, successors, administrators and assigns, (collectively "Releasees"), of and from any and all claims, actions, causes of action, suits, debts, charges, complaints, claims, liabilities, tax obligations, promises, agreements, controversies, damages, and expenses (including attorney fees and costs actually incurred), of any nature whatsoever, known or unknown, in law or equity, arising out of the facts contained in the RECITALS, as well as any other claims based on constitutional, statutory, common law, or regulatory grounds.

2. Except as for any specific rights created by virtue of this Agreement, the Saunders Entities promise not to institute any future suits, administrative or regulatory actions, or proceedings at law or in equity or any arbitration or administrative proceedings against the Releasees for or on account of any claim or cause of action arising specifically out of the facts in the RECITALS herein.

3. This is intended as a full and complete release and discharge of any or all claims that The Saunders Entities may or might have or had against the Releasees regarding the subject matter hereof, and the Saunders Entities does so in full and final settlement, release and discharge of any and all such claims and the Saunders Entities intends to and does forever hereby release and discharge the Releasees of and from any and all liability of any nature whatsoever for all damages to each other, specifically including, but not limited to, all past, present and future rights to recover for sums of money compromised in this Agreement on account of said events alleged in the RECITALS, as well as for all consequences, effects and results thereto and resulting damages to each other, whether the same or any circumstances pertaining thereto are now known or unknown to the Saunders Entities or anyone else, expected or unexpected by the Saunders Entities or anyone else, or have already appeared or developed or may now be latent or may in the future appear or develop or become known to the Saunders Entities or anyone else.

4. This Agreement constitutes a compromise, settlement, and release of disputed claims and is being entered into solely to avoid the burden, inconvenience, and expense of litigating those claims. No Party to this Agreement admits any liability to the other Party concerning any such claim or any other matter. Each Party expressly denies liability as to every claim the other Party may assert. Therefore, this Agreement is not to be and shall never be construed or deemed an admission or concession by the Releasees of liability or culpability at any time for any purpose concerning any claim being compromised, settled, and released or any other matter.

SECTION 3

MISCELLANEOUS PROVISIONS

1. Notices. All notices, offers, or other communications required or permitted to be given pursuant to this Agreement shall be in writing and shall be considered as properly given or made (i) if delivered personally or (ii) upon receipt by facsimile transmission (with written confirmation of receipt) or confirmed electronic mail; or (iii) after the expiration of the second business day following deposit with documented overnight delivery service; or (iv) five business days of transmission by regular mail. All notices given or made pursuant hereto shall be so given or made to the parties at the following addresses:

If to American Cannabis Company, Inc. :

Attention: Mr. Ellis Smith

1004 South Tejon Street

Colorado Springs, CO 80903

E-mail: smith@americancannabisconsulting.com

If to TEC, LLC :

Attention: Mr. Joseph Cleghorn

701 Waddell Avenue

Key West, FL 33040

E-mail: jckeys1@icloud.com

If to the Saunders Entities :

Mr. Roger Scott Saunders

16208 16th Ave SW

Burien, WA 98166

E-mail: rssriparian@gmail.com

The address of any party hereto may be changed by a notice in writing given in accordance with the provisions hereof.

2. Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable, such provision shall be severed and enforced to the extent possible or modified in such a way as to make it enforceable, and the invalidity, illegality or unenforceability thereof shall not affect the validity, legality, or enforceability of the remaining provisions of this Agreement.

3. Binding on Affiliated Third Parties. This Agreement shall inure to the benefit of and shall be binding upon the Parties and their respective agents, representatives, executors, administrators, trustees, personal representatives, partners, directors, officers, shareholders, agents, attorneys, insurers, employees, representatives, predecessors, successors, heirs, and assigns.

4. Governing Law. This Agreement shall be governed by and construed following the laws of the State of Colorado without regard to principles of conflict of laws. Any controversy or claim arising from or relating to this Agreement shall be settled by arbitration administered by JAMS in the County of Denver, City of Denver, Colorado. The Parties shall equally share in the costs of arbitration. If the arbitrator determines that a particular party is the prevailing party, then the arbitrator shall award reasonable attorney fees as an element of costs.

5. Counterparts. This Agreement may be executed in multiple counterparts, all of which shall be deemed originals, and with the same effect as if all Parties had signed the same document. All of such counterparts shall be construed together with and shall constitute one Agreement, but in making proof, it shall only be necessary to produce one such counterpart. A facsimile transmission shall be as valid and enforceable as an original.

6. Entire Understanding. This Agreement is the entire, final, and complete agreement of the Parties relating to the subject of this Agreement and supersedes and replaces all prior or existing written and oral agreements between the Parties or their representatives relating thereto.

7. Further Assurances. The parties agree to execute and deliver to each other such other documents, and to do such other acts and things, all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement.

8. Amendments. This Agreement shall not be amended or otherwise modified unless in writing signed by all of the parties hereto.

9. Acknowledgment. The Parties acknowledges (i) They have read this Agreement and have consulted with their respective attorneys concerning its contents and legal consequences and have requested any change in language necessary or desirable to effectuate their intent and expectations so that the rule of construction of contracts construing ambiguities against the drafting party shall be inapplicable; (ii) They have taken all corporate actions and obtained all corporate authorizations, consents and approvals as are conditions precedent to their authority to execute this Agreement, and thus warrant that they are fully authorized to bind the Party for which they execute this Agreement; and, (iii) There has been and will be no assignment or other transfer of any claim released herein, or any part thereof, and each Party agrees to defend, indemnify and hold harmless the other party from any claims, obligations, or other liabilities, including specifically attorney’s fees and costs incurred, which result from the assertion by any third party of a right to any claim which is released by this Agreement.

10. Assignment. This Agreement shall be binding upon and inure to the benefit of each party hereto or to such Party's heirs, executors, administrators, successors, and assigns, and nothing in this Agreement, express or implied, is intended to confer upon any other person any rights or remedies of any nature whatsoever under or because of this Agreement.

11. Confidentiality. Each of the Parties represents and agrees that it will keep the terms, provisions, and amounts in this Agreement confidential and that it will not, without the consent of the other Party, disclose, divulge, or furnish such confidential information to any person other than their immediate families, their attorney, and accountant (all of whom will be informed of and bound by this confidentiality provision) except as required by law or, if necessary, to any applicable taxing authorities.

Signature Page Follows

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Execution Date above.

AMERICAN CANNABIS COMPANY, INC.

	Name:	Ellis Smith

	Principal Executive Officer

ACKNOWLEDGED AND AGREED by ROGER SCOTT SAUNDERS, INDIVIDUALLY, and on behalf of Medihemp, LLC, SLAM Enterprises, LLC, and Medical Cannabis Caregivers, Inc. (Collectively, the “Saunders Entities”)

	Name:	Roger Scott Saunders

	Title:	Manager, Director, Authorized Signer

APPROVED AS TO FORM:

LAW OFFICES OF CLIFTON BLACK, PC

By
Name:	Clifton Black
Title:	Counsel for Saunders Entities

Exhibit 10.5

First Amendment to

Settlement and Release of Claims Agreement

This First Amendment to Settlement and Release of Claims Agreement (“Agreement”) is entered into by and between American Cannabis Company, Inc., a Delaware corporation (collectively, “ACC”), and Roger Scott Saunders, an individual, and Medihemp, LLC (“Medihemp”) and its wholly owned subsidiaries, SLAM Enterprises, LLC (“SLAM”) and Medical Cannabis Caregivers, Inc. (“Medical Cannabis”) (each formed and operating in their respective states of formation or corporation, and, together with Roger Scott Saunders, collectively referred to as the “Saunders Entities.” ACC and the Saunders Entities are collectively referred to as the “Parties”) as of November 4, 2024 (the “Effective Date”).

RECITALS

On November 1, 2024, the Saunders Entities and ACC circulated a Settlement and Release of Claims Agreement. The document included a signature block for review and approval by the Saunders Entities’ counsel.

Although both the Saunders Entities and ACC executed the Settlement and Release of Claims Agreement, counsel for the omission Entities noted one error of omission and did not sign the document.

Pursuant to Section 8 of the Settlement and Release of Claims Agreement, the Parties agree to amend the document to correct this error.

The original Settlement and Release of Claims Agreement is attached hereto, and its terms and conditions are incorporated herein by reference.

NOW THEREFORE, in consideration for the mutual promises and covenants contained herein, the sufficiency of which is hereby acknowledged, the Parties hereto agree as follows:

INCORPORATION OF RECITAL CLAUSES

AMENDMENT TO SECTION 1 OF THE SETTLEMENT AND RELEASE OF CLAIMS AGREEMENT

Section 1 of the Settlement and Release of Claims Agreement is hereby amended to include subsection 6, as follows:

CONDITIONS PRECEDENT TO RELEASE OF ALL CLAIMS BY THE SAUNDERS ENTITIES IN FAVOR OF ACC

This release will be effective upon the completion of the transactions under the Stock Purchase Agreement between ACC and TEC, including the following actions:

Execution of the Stock Purchase Agreement by both TEC and ACC,

TEC’s payment of the $310,000 Purchase Price to the Escrow Agent for disbursement consistent with the terms and conditions of the Escrow Agreement,

Issuance by the Seller of 302,900,458 shares of common stock to TEC at $0.001023 per share,

Issuance of MED’s Contingent Approval Letter under 1 CCR 212-3:2-245 (A) & (D), authorizing the transfer of the Medical Marijuana Optional Premises Cultivation license and a Medical Marijuana-Infused Product Manufacturer license to Hollister & Blacksmith, Inc. and Ellis Smith, and

Disbursement of at least $135,000 from escrow to the Saunders Entities in accordance with Section 2.03 of the Stock Purchase Agreement.

Unless and until payment of at least $135,000 is tendered into the trust account of the Escrow Agent for the benefit of the Saunders Entities and is paid in accordance with Section 2.03 of the Stock Purchase Agreement, the UCC-1 financing statements against the assets of ACC shall remain in full force and effect.

Signature Page Follows

IN WITNESS WHEREOF, the Parties have executed this First Amendment to Settlement and Release of Claims Agreement as of the Execution Date above.

AMERICAN CANNABIS COMPANY, INC.

	Name: Ellis Smith

	Principal Executive Officer

ACKNOWLEDGED AND AGREED by ROGER SCOTT SAUNDERS, INDIVIDUALLY, and on behalf of Medihemp, LLC, SLAM Enterprises, LLC, and Medical Cannabis Caregivers, Inc. (Collectively, the “Saunders Entities”)

	Name: Roger Scott Saunders

	Title: Manager, Director, Authorized Signer

APPROVED AS TO FORM:

	LAW OFFICES OF CLIFTON BLACK, PC

	Name: Clifton Black
	Title: Counsel for Saunders Entities

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE & CHIEF FINANCIAL OFFICER

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, I, Joseph Cleghorn, certify that:

I have reviewed this report on Form 10-Q of American Cannabis Company, Inc., for the fiscal quarter ended June 30, 2024;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements and other financial information included in this report fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: February 11, 2025

/s/ Joseph Cleghorn

Joseph Cleghorn

Chief Executive Officer

& Interim Chief Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of American Cannabis Company, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joweph Cleghorn, Chief Executive Officer & Interim Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002, that, to the best of my knowledge and belief:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: February 11, 2025

/s/Joseph Cleghorn

Joseph Cleghorn

Chief Executive Officer &

Interim Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Cover - shares	6 Months Ended
Cover - shares	Jun. 30, 2024	Feb. 11, 2025
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2024
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity File Number	000-26108
Entity Registrant Name	AMERICAN CANNABIS COMPANY, INC.
Entity Central Index Key	0000945617
Entity Tax Identification Number	90-1116625
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	1004 Tejon Street
Entity Address, City or Town	Colorado Springs
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80903
City Area Code	303
Local Phone Number	974-4770
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		185,800,915

CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)	Jun. 30, 2024	Dec. 31, 2023
Current Assets
Cash and equivalents	$ 2,747	$ 21,085
Accounts receivable, Net	136,624	234,330
Inventory	265,773	586,206
Prepaid expenses and other current assets	13,976	58,757
Total Current Assets	419,120	900,378
Property and equipment, net	389,788	410,344
Other Assets
Intangible assets, net amortization	926,778	1,037,889
Right of use assets - operating leases, net	379,562	474,472
Long term deposits	6,000	6,000
Total Other Assets	1,312,340	1,518,361
TOTAL ASSETS	2,121,248	2,829,083
Current Liabilities
Accounts payable	1,180,132	1,010,698
Advances from clients	39,046	162,414
Accrued and other current liabilities	558,478	467,495
Stock payable	17,021	17,021
Right of use liabilities, all current	203,292	199,891
Litigation settlement, current	2,500	10,000
Note payables, current	195,937	300,000
Total Current Liabilities	2,196,406	2,167,519
LONG TERM LIABILITIES
LTD note payable	384,524	385,433
Right of use liabilities - LT	176,271	274,581
Total Long Term Liabilities	560,795	660,014
TOTAL LIABILITIES	2,757,201	2,827,533
Shareholders’ Equity
Preferred Stock, $0.01 par value, 5,000,000 shares authorized; 0 shares issued and outstanding at June 30, 2024 and December 31, 2023 , respectively
Common stock, $0.00001 par value; 500,000,000 shares authorized; 185,800,915 and 171,402,938 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively	1,858	1,714
Additional paid-in capital	13,872,036	13,740,961
Accumulated deficit	(14,509,847)	(13,741,125)
Total Shareholders’ Equity	(635,953)	1,550
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 2,121,248	$ 2,829,083

CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares	Jun. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.00001	$ 0.00001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	185,800,915	171,402,938
Common stock, shares outstanding	185,800,915	171,402,938

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Revenue
Consulting Services	$ 21,629	$ 307,685	$ 29,958	$ 468,500
Product & Equipment	86,788	374,209	104,389	737,759
Cannabis Products	323,461	170,835	553,252	358,856
Total Revenues	431,878	852,729	687,599	1,565,115
Cost of Revenues
Cost of Consulting Services		58,085		103,085
Cost of Products and Equipment	72,130	290,079	89,392	507,646
Cost of Cannabis Products	662,852	138,179	795,616	311,488
Total Cost of Revenues	734,982	486,343	885,008	922,219
Gross Profit	(303,104)	366,386	(197,409)	642,896
Operating Expenses
General and Administrative	249,309	437,996	481,444	1,081,600
Selling and Marketing	4,334	52,849	6,684	117,384
Stock-Based Compensation expense		7,935		17,021
Total Operating Expenses	253,643	498,780	488,128	1,216,005
Loss from Operations	(556,747)	(132,394)	(685,537)	(573,109)
Other Income (Expenses)
Interest Expense	(82,504)	(32,728)	(89,982)	(64,363)
Gain on fair market value of derivatives	3,080		3,080
Other Income	(1)	176,966	3,717	186,316
Total Other Income (Expenses)	(79,425)	144,238	(83,185)	121,953
Loss Before Income Taxes	(636,172)	11,844	(768,722)	(451,156)
Provision for income taxes
NET (Loss) Income	$ (636,172)	$ 11,844	$ (768,722)	$ (456,156)
Net loss per common share - basic	$ (0.00)	$ (0.00)	$ (0.00)	$ (0.01)
Net loss per common share - diluted	$ (0.00)	$ (0.00)	$ (0.00)	$ (0.01)
Weighted average common shares - basic	185,800,915	85,727,938	184,300,055	84,795,246
Weighted average common shares - diluted	185,800,915	85,727,938	184,300,055	84,795,246

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Dec. 31, 2022	$ 922	$ 11,949,409	$ (10,080,709)	$ 1,869,622
Beginning balance, shares at Dec. 31, 2022	92,152,938
Stock based compensation to employees		74,342		74,342
Net loss			(522,175)	(522,175)
Ending balance, value at Mar. 31, 2023	$ 922	12,023,751	(10,543,709)	1,480,964
Ending balance, shares at Mar. 31, 2023	92,152,938
Net loss			11,844	11,484
Ending balance, value at Jun. 30, 2023	$ 922	12,023,751	(10,531,865)	1,492,808
Ending balance, shares at Jun. 30, 2023	92,152,938
Beginning balance, value at Dec. 31, 2023	$ 1,714	13,740,961	(13,741,125)	1,550
Beginning balance, shares at Dec. 31, 2023	171,402,938
Net loss			(132,550)	(132,550)
Ending balance, value at Mar. 31, 2024	$ 1,714	13,740,961	(13,873,675)	(131,000)
Ending balance, shares at Mar. 31, 2024	171,402,938
Stock issued on conversion of debt	$ 144	67,005		67,149
Stock issued on conversion of debt, shares	14,397,977
Settlement of derivative		64,070		64,070
Net loss			(636,172)	(636,172)
Ending balance, value at Jun. 30, 2024	$ 1,858	$ 13,872,036	$ (14,509,847)	$ (635,953)
Ending balance, shares at Jun. 30, 2024	185,800,915

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$ (768,722)	$ (451,155)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	131,667	121,499
Discount amortization	67,150
Gain on change in fair market value of derivative liabilities	(3,080)
Right of use lease asset amortization	94,910	41,072
Changes in operating assets and liabilities:
Accounts receivable	97,706	175,807
Inventory	320,433	(155,318)
Prepaid expenses and other current assets	44,781	(4,021)
Accounts payable	169,434	130,165
Advances from clients	(123,368)	(124,492)
Accrued and other current liabilities	83,482	223,703
Litigation settlement liability	(7,500)	(87,500)
Operating Lease Liability	(94,909)	(41,072)
Net Cash Provided by (Used In) Operating Activities	19,484	(171,362)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(39,101)
Net Cash Used in Investing Activities		(39,101)
CASH FLOWS FROM FINANCING ACTIVITIES:
LTD Note Payable	(909)	185,660
Repayments of notes payable	(36,913)
Net Cash Provided by (Used in) Financing Activities	(37,822)	185,660
NET DECREASE IN CASH	(18,338)	(24,803)
CASH AT BEGINNING OF PERIOD	21,085	117,547
CASH AT END OF PERIOD	2,747	92,742
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes
Cash paid for interest
NONCASH INVESTING AND FINANCING:
Stock issued on conversion of debt	67,005
Settlement of derivative liability	$ 64,070

Principles of Consolidation

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Principles of Consolidation

Note 1. Principles of Consolidation.

Description of Business

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Description of Business

Note 2. Description of Business.

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 3. Summary of Significant Accounting Policies

Basis of Accounting

Going Concern

Use of Estimates in Financial Reporting

Unaudited Interim Financial Statements

Cash and Cash Equivalents

Accounts Receivable

Deposits

Inventory

Prepaid Expenses and Other Current Assets

Significant Clients and Customers

Three customers accounted for 43.4% of the Company’s total revenues during the six months ended June 30, 2024.

Three customers accounted for 42.5% of the Company’s total revenues during the six months ended June 30, 2023.

Property and Equipment, net

Goodwill

The Company does not have any other indefinite-lived intangible assets.

Intangible Assets, net

Accounting for the Impairment of Long-Lived Assets

Fair Value Measurements

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the measurement of the fair value of the assets or liabilities.

Revenue Recognition

We recognize revenue in accordance with ASC 606 using the following 5 steps to identify revenues:

(1)

Identify the contract with the Customer. Our customary practice is to obtain written evidence, typically in the form of a contract or purchase order.

(2)

(3)

Determination of the transaction price. Prices are typically fixed, and no price protections or variables are offered.

(4)

Allocation of the transaction price to the performance obligations in the contract. Transaction prices are typically allocated to the performance obligations outlined in the contract.

(5)

Product and Equipment Sales

Consulting Services

Cannabis Sales

Loyalty Reward Program

Costs of Revenues

Advertising and Promotion Costs

Shipping and Handling Costs

For product and equipment sales, shipping and handling costs are included as a component of the cost of revenues.

Stock-Based Compensation

Research and Development

Income Taxes

Net Loss Per Common Share

Related Party Transactions

The Company follows FASB ASC subtopic 850-10, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

Impact of COVID-19 Pandemic

Recent Accounting Pronouncements

Naturaleaf Asset Acquisition

6 Months Ended

Jun. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Naturaleaf Asset Acquisition

Note 4. Naturaleaf Asset Acquisition

Naturaleaf agreed to sell or assign to the Company, and the Company purchased and was the assignee of the following assets:

Three Medical Marijuana (MMC) Store Licenses;

One Marijuana Infused Product Licenses (MIPS); and,

One Option Premises Cultivation License (OPC); and,

Related real property assets, goodwill, and related business assets.

As a result, the Company has expanded its business model to include the cultivation and retail sale of cannabis in the medicinal cannabis industry.

Accounts Receivable and Advance from Clients

6 Months Ended

Jun. 30, 2024

Receivables [Abstract]

Accounts Receivable and Advance from Clients

Note 5. Accounts Receivable and Advance from Clients


	June 30, 2024			December 31, 2023
Accounts Receivable – Trade	$	140,695		$	238,401
Less: Allowance for Doubtful Accounts		(4,071	)		(4,071	)
Accounts Receivable, net	$	136,624		$	234,330

The Company had bad debt expenses during the six months ended June 30, 2024, and 2023 of $0 and $12,000, respectively.

Our Advances from Clients had the following activity:

Schedule of advances from clients
	June 30, 2024			December 31, 2023
Beginning Balance	$	162,414		$	280,705
Additional deposits received		—			659,790
Less: Deposits recognized as revenue		(123,368	)		(778,801	)
Ending Balance	$	39,046		$	162,414

Inventory

6 Months Ended

Jun. 30, 2024

Inventory Disclosure [Abstract]

Inventory

Note 6. Inventory

Inventory consisted of the following:

Schedule of inventory
	June 30, 2024		December 31, 2023
Raw Materials - Soil	$	—	$	75,300
Work In Process - Cultivation		225,057		444,532
Finished Goods - Soil		—		—
Finished Goods - Cannabis Retail		40,716		66,374
Total Inventory	$	265,773	$	586,206

Property and Equipment, net

6 Months Ended

Jun. 30, 2024

Property, Plant and Equipment [Abstract]

Property and Equipment, net

Note 7. Property and Equipment, net

Property and equipment, net, was comprised of the following:


	June 30, 2024			December 31, 2023
Office equipment	$	54,406		$	47,380
Software		13,204			13,204
Furniture and Fixtures		2,328			2,328
Machinery and Equipment		517,510			517,510
Property and equipment, gross	$	587,448		$	580,422
Less: Accumulated Depreciation		(197,660	)		(170,099	)
Property and equipment, net	$	389,788		$	410,344

Intangibles Assets, Net

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Intangibles Assets, Net

Note 8. Intangibles Assets, Net

Schedule of identified intangible asset
	June 30, 2024
	Gross carrying amount		Accumulated amortization			Carrying value		Estimated useful life
Licenses	$	800,000	$	(214,552	)	$	585,448		15 years
Brand	$	660,000	$	(318,669	)	$	341,331		5 years
Patent Applications	$	—		—		$	—		—
Total intangible assets, net	$	1,460,000	$	(533,221	)	$	926,778


	December 31, 2023
	Gross carrying amount		Accumulated amortization			Carrying value		Estimated useful life
Licenses	$	800,000	$	(187,866	)	$	612,114		15 years
Brand	$	660,000	$	(252,699	)	$	407,311		5 years
Patent Applications	$	18,464		—		$	18,464		—
Total intangible assets, net	$	1,478,464	$	(440,555	)	$	1,037,909


Year Ended December 31,
2024	$	186,000
2025	$	186,000
2026	$	145,997
2027	$	54,000
Total	$	571,997

Accrued and Other Current Liabilities

6 Months Ended

Jun. 30, 2024

Payables and Accruals [Abstract]

Accrued and Other Current Liabilities

Note 9. Accrued and Other Current Liabilities

Accrued and other current liabilities consisted of the following:


	June 30, 2024		December 31, 2023
Accrued Interest	$	150,172	$	135,213
Accrued Payroll		21,172		11,711
Sales Tax Payable		21,528		8,319
Other Accrued Expenses & Payables		356,606		312,252
Accrued and other current liabilities	$	558,478	$	467,495

Stock Payable

6 Months Ended

Jun. 30, 2024

Equity [Abstract]

Stock Payable

Note 10. Stock Payable

The following summarizes the changes in common stock payable:

Schedule of stock payable
	Amount
December 31, 2023	$	17,021
Additional Expenses Incurred		—
Payments Upon Issuance of Shares		—
June 30, 2024	$	17,021

Operating Lease Right-of-Use Asset/Operating Lease Liability

6 Months Ended

Jun. 30, 2024

Operating Lease Right-of-use Assetoperating Lease Liability

Operating Lease Right-of-Use Asset/Operating Lease Liability

Note 11. Operating Lease Right-of-Use Asset/Operating Lease Liability

Our headquarters are located at 1004 Tejon Street, Colorado Springs, CO.

The Company’s lease portfolio consists of the following.

●

As of June 30, 2024, the aggregate remaining annual lease payments of operating lease liabilities are as follows:


	Operating Leases
2023		428,229
Total		428,229
Less: amount representing interest		—
Present value of future minimum lease payments		428,229
Less: current obligations under leases		208,464
Long-term lease obligations	$	(219,765	)

Loans Payable

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Loans Payable

Note 12. Loans Payable

Amendment to Naturaleaf Seller Note

Notes Payable.

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Notes Payable.

Note 13. Notes Payable.

Related Party Transactions

6 Months Ended

Jun. 30, 2024

Related Party Transactions

Note 14. Related Party Transactions

Stock-Based Compensation

6 Months Ended

Jun. 30, 2024

Equity [Abstract]

Stock-Based Compensation

Note 15. Stock-Based Compensation

Restricted Shares Compensation

Shareholders’ Equity

6 Months Ended

Jun. 30, 2024

Equity [Abstract]

Shareholders’ Equity